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Verizon [17]
4 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]4 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

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Many customers shop at All Natural because of the employees’ extensive product knowledge. In a SWOT analysis, the employees’ hig
Alexus [3.1K]

Answer:

Strenghts

Explanation:

The SWOT Analysis have four components:

-Strenghts refer to things that are internal to the organization that allow it to perform well and help to differentiate from competitors.

-Weaknesses are things that don't allow the company to have a good performance and are an internal factor.

-Opportunities are external factors that provide an advantage for the company.

-Threats are external factors that can affect negatively the organization.

According to this, the answer is that in a SWOT analysis, the employees’ high levels of product knowledge are an example of the company’s strenghts because this is an internal factor that helps the company to perform well.

4 0
3 years ago
Explain the relationship between wages and derived demand
Oksana_A [137]

Here is you're answer:

Wages is the amount of money a person gets paid for labor, derived demand is a demand for more money because of the increase of labor the workers have to do. To conclude the relationship between the two is that "if the worker gains more labor they would make a derived demand to increase their wage."

Hope this helps!

7 0
3 years ago
There are three reasons for the downward slope of the demand curve:
Virty [35]

Answer:

Explanation:

From the above question, three reasons for the downward slope of the demand curve and the effect with the component of aggregate demand are:

1. Net Exports : the international trade effect

2. consumption : the wealth effect

3. investment : the interest rate effect

4 0
3 years ago
12. Provide five benefits of having a budget.
DiKsa [7]

Answer:

Planning orientation

Profitability review

Assumptions review

Performance evaluations

Funding planning

Explanation:

5 0
2 years ago
Read 2 more answers
1. When a business finds it necessary to layoff some employees (due to slowing sales), what positive effects might this have for
Artist 52 [7]

Answer:

PART A

(1) To reduce wastages

(2) To increase profit margin

(3) To reduce cost of operations.

PART B

(1) NO,he is not included

(2) Because he is unable to work or be gainfully employed.

Explanation:

Layoff is a manpower management process through which Organisations down size their manpower strength or number in order to meet certain specified Objectives. Layoffs usually takes place in Organisations that are not meeting their Strategic objectives such profit making,cost reduction and Control etc.

Unemployment is a term used to describe the inability of a person or group of persons who are willing and have the capacity to work but could not secure gainful employment in an economy.

MR. SMITH DOES NOT HAVE THE CAPACITY TO WORK,HENCE HE CAN NOT BE INCLUDED IN THE UNEMPLOYMENT STATISTICS.

3 0
3 years ago
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