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
Valentin [98]
3 years ago
11

Jand, Inc., currently pays a dividend of $1.38, which is expected to grow indefinitely at 5%. If the current value of Jand’s sha

res based on the constant-growth dividend discount model is $35.41, what is the required rate of return? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Business
1 answer:
V125BC [204]3 years ago
7 0

Answer:

9.09%

Explanation:

Use Gordon growth model of stock valuation to find the required rate of return;

Price = D1/ (r-g)

this can also be written as \frac{D0(1+r)}{(r-g)}

whereby,

Price = $35.41

D0 = Current dividend = 1.38

D1 = Next year's dividend = 1.38(1.05) = 1.449

g = growth rate = 5% or 0.05 as a decimal

r = required return = ?

Rewrite the formula <em>"Price = D1/ (r-g) " </em>to find <em>r;</em>

r = \frac{D1}{Price} +g

r = \frac{1.449}{35.41} + 0.05\\ \\ =0.04092 +0.05\\ \\ =0.09092

as a percentage, the required return = 9.09%

You might be interested in
Which of the following systems would work best for a very standardized product that has a fairly high and predictable demand? a.
Margaret [11]

Answer:

The answer is b. make-to-stock system

Explanation:

Make-to-stock system  is a build-ahead production approach in which production plans may be based upon sales forecasts and/or historical demand. It is a traditional production strategy that is used by businesses to match the inventory with anticipated consumer demand.

5 0
3 years ago
Time Remaining 36 minutes 46 seconds00:36:46 Item 6Item 6 Time Remaining 36 minutes 46 seconds00:36:46 A company's Cash account
Diano4ka-milaya [45]

Answer:

Cash account balance $5,680

- bank service fees ($47)

- NSF check ($190)

+ customer's note receivable $560

<u>+ interest earned $66                    </u>

adjusted cash account balance $6,069

Dr Bank fees expense 47

    Cr Cash 47

Dr Accounts receivable 190

    Cr Cash 190

Dr Cash 560

    Cr Notes receivable 560

Dr Cash 66

    Cr Interest revenue 66

7 0
3 years ago
William and Charlotte Collins divorced in November of year 1. William moved out and Charlotte remained in their house with their
anzhelika [568]

Answer: B. Charlotte

Explanation:

Preference is given to people that live with the dependent so this puts William at the least priority because he doesn't live with Autumn thereby leaving Charlotte and her mother.

Preference is then given to the biological parents of the dependent which means that Diana is has second priority. Charlotte is therefore the the most preferred to claim her daughter as a dependent which would allow her greater tax deductions.

5 0
2 years ago
Richard Redden, the sole stockholder, contributed $71,000 in cash and land worth $132,000 in exchange for common stock to open a
Aloiza [94]

Answer: C. Debit cash $71,000; debit land $132,000; credit Common Stock $203,000.

Explanation:

From the question, we are informed that Richard Redden, the sole stockholder, contributed $71,000 in cash and land worth $132,000 in exchange for common stock to open a new business, RR Consulting.

The journal entries will RR Consulting make to record this transaction will be:

Debit cash $71,000; debit land $132,000; credit Common Stock $203,000.

7 0
3 years ago
Read 2 more answers
Choose the correct statement.
Kamila [148]

Answer:

The correct answer is D. Choices that are the best for more than one person are said to be in the social interest.

Explanation:

The social interest is a concept sufficiently clarified in Company Law. The Capital Companies Law refers to it in terms of challenging social agreements: if an agreement is not in accordance with the corporate interest, it can be challenged. It is only negatively contested, that is, if the plaintiff can argue that the agreement is contrary to the social interest, so that it is not a validity requirement that the agreement be in accordance with the social interest. Likewise, if the administrators act against the social interest when they exercise their discretionary powers, they incur responsibility for violation of their duty of loyalty.

3 0
3 years ago
Other questions:
  • List three impulse convenience goods that you or someone you know has purchased.
    14·2 answers
  • Debt management ratios measure the extent to which a firm uses financial leverage and the degree of safety afforded to . They in
    5·1 answer
  • When Pete Mills went to withdraw $10,100 from the NFA Mutual fund, he was informed that the fund would charge 6 percent of the a
    7·1 answer
  • A manager from a developing country is overseeing a multinational’s operations in a country where drug trafficking and lawlessne
    11·1 answer
  • Jackson has the choice to invest in city of Mitchell bonds or Sundial, Inc. corporate bonds that pay 5.6 percent interest. Jacks
    15·1 answer
  • During Year 1, Hardy Merchandising Company purchased $20,000 of inventory on account. Hardy sold inventory on account that cost
    7·1 answer
  • Suppose that Sweden can make a unit of furniture with 10 days of labor and a unit of steel with 15 days labor, while Germany can
    15·1 answer
  • How to make decimal into scientific number?<br>i.g: 4.579×106​
    9·1 answer
  • In an organic organization:_______
    10·2 answers
  • Under the path-goal theory of leadership, what type of leader behavior includes setting challenging goals for the employee with
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!