1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Verizon [17]
3 years ago
15

Dyer Furniture is expected to pay a dividend of D1 = $1.25 per share at the end of the year, and that dividend is expected to gr

ow at a constant rate of 6.00% per year in the future. The company's beta is 1.15, the market risk premium is 5.50%, and the risk-free rate is 4.00%. What is Dyer's current stock price?
Business
1 answer:
zmey [24]3 years ago
8 0

Answer:

Market price: 28.90

Explanation:

We will calculate the stock price using the gordon dividend grow model:

\frac{divends}{return-growth} = Intrinsic \: Value

D1 = 1.25

grow = g = 6% = 6/100 = 0.06

return= for the return, based on the information give, we will calculate it using the CAPM model:

Ke= r_f + \beta (r_m-r_f)  

risk free = 0.04

premium market=(market rate - risk free)= 0.055

beta(non diversifiable risk)= 1.15    

Ke= 0.04 + 1.15 (0.055)  

Ke =cost of capital = return in the dividend grow formula = 0.10325  

Now, we calculate the stock price:

\frac{1.25}{0.10325-0.04} = Intrinsic \: Value

Stock: 28.9017341

Market price: 28.90

You might be interested in
A general contractor is managing a construction project that will add a new conference room to an existing office building. The
professor190 [17]

Answer:

A) Using a change management system to influence performance

Explanation:

First of all, since the change was proposed by the customer, any delay in the construction project caused by their new request should not trigger the damage clause.

The contractor should use a change management system so the existing baseline is not altered by the delay. A change management system is responsible for managing all the changes that might occur during the project's inception until its completion. It is important that all changes or alterations to the original schedule are properly recorded and authorized (in this case to prevent the damage clause).

By using the change management system, the organization has a standardized methodology for handling changes in the project's schedule. This way any negative impact can be reduced.

6 0
3 years ago
What you give up to obtain an item is called your
lara [203]
A) Opportunity cost

because an opportunity cost is for example you have to pick from a xbox one or a ps4. You saw that the ps4 was more scarce for you but you had to give up the xbox one to obtain the ps4. Nothing is free in life!!! You sacrificed the xbox one for the ps4
7 0
3 years ago
Question Number 5) UPS management feels that one of the main advantages ________ provides to the company is structure a union sa
matrenka [14]

One of the main advantages of C. The Union in a workplace is that it helps to provide a structure.

<h3>What is a Labor Union?</h3>

This refers to a group that protects the rights and interests of workers to have better working conditions and remunerations.

Hence, we can see that the importance of labor unions cannot be overemphasized as according to UPS management, they believe that one of the main advantages of C. The Union in a workplace is that it helps to provide a structure

Read more about labor unions here:

brainly.com/question/881501

7 0
1 year ago
Last winter, a guest at a nearby motel fell through the ice and was not rescued in time. the motel's name was included in news c
Hitman42 [59]
Any more info about who Dave and Betty are? Any answer choices?
6 0
3 years ago
Read 2 more answers
What are the benefits of hiring a teenage worker?
stealth61 [152]
Seen as it may be 1 of there first jobs you can pay them less because they don't have as much experience as someone has has worked in the job for years
3 0
3 years ago
Read 2 more answers
Other questions:
  • A weaker dollar benefits ---------- and hurts-----------
    5·1 answer
  • Where notes can be added?
    14·1 answer
  • Maxwell Communications paid a dividend of $1.35 last year. Over the next 12 months, the dividend is expected to grow at 11 perce
    13·1 answer
  • Petrus Framing's cost formula for its supplies cost is $1,710 per month plus $9 per frame. For the month of March, the company p
    8·2 answers
  • BruceCo is planning on selling backpacks for $100 each. The company can buy the backpacks for $30.00 and have them customized fo
    7·1 answer
  • Which of the following statements is true of the Age Discrimination in Employment Act?
    11·1 answer
  • Equipment was purchased for $94700 on January 1, 2021. Freight charges amounted to $3800 and there was a cost of $12000 for buil
    11·1 answer
  • The broker has noticed that a great number of people who are buying in the neighborhood where his listing is located speak Russi
    13·1 answer
  • Why do some firms, industries, and cultures have different CSR thresholds than others? Illustrate your answer with real examples
    14·1 answer
  • The excerpt most directly expresses an economic perspective that:.
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!