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artcher [175]
3 years ago
9

The next dividend payment by Hoffman, Inc., will be $2.65 per share. The dividends are anticipated to maintain a growth rate of

4.5 percent forever. If the stock currently sells for $43.15 per share, what is the required return
Business
1 answer:
-Dominant- [34]3 years ago
5 0

Answer: 6.42%

Explanation:

To calculate this, we use the formula for the Dividend Discount Model/ Gordon Growth Formula as follows:

P = D1/(r - g)

Where,

P = current stock price

D1 = Next dividend

r = required return

g = growth rate

We can make r the subject of the equation by,

P = D1/(r - g)

P(r - g) = D1

r - g = D1/P

r = D1/P + g

Calculating therefore we have,

r = 2.65/43.15 + 0.045

= 0.06417728852

= 6.42%

6.42% is the required return.

If you need any clarification do comment.

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Answer:

Instructions are below.

Explanation:

Giving the following information:

beginning inventory= $505,700

Cost of goods manufactured= $290,900

Ending inventory= $485,300

Net sales= $759,200.

To calculate the cost of goods sold, we need to use the following formula:

COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory

COGS= 505,700 + 290,900 - 485,300

COGS= $311,300

Now, we can determine the gross profit:

Gross profit= net sales - COGS

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Gross profit= 447,900

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Answer:

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Answer:

The answer is below

Explanation:

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