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just olya [345]
3 years ago
11

What is the stock price per share for a stock that has a required return of 12%, an expected annual dividend of $3.15 per share

in the first year, and a constant (sustainable) growth rate of dividends of 8%
Business
1 answer:
Simora [160]3 years ago
5 0

Answer:

Price per share = $78.75

Explanation:

<em>The Dividend Valuation Model is a technique used to value the worth of an asset. According to this model, the worth of an asset is the sum of the present values of its future cash flows discounted at the required rate of return.</em>

If dividend is expected to grow at a given rate , the value of a share is calculated using the formula below:

Price=Do (1+g)/(k-g)  

Where Do- Dividend now, g- growth rate, k- required rate of return(cost of equity)

<em>Note Do (1+g) represents the expected dividend in the first year</em>

DATA:

Do (1+g) = 3.15

g= 8%

k= 12%

Price per share = 3.15/(0.12- 0.08) = $78.75

Price per share = $78.75

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The number of adjustments that Steve has to make for Jones's property is 0.

<h3>What is a comparative market analysis?</h3>

The comparative market analysis is the term that is used to refer to the estimate of the value of a person's home which is based on all of the other homes that are similar homes in the area.

The adjustments that have to be made to a property is going to be 0 based on the property.

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2 years ago
Last week Paul, CEO of Quality Furniture in South Carolina, traveled to Europe to visit customers. While overseas, Paul checked
kaheart [24]

Answer:

the global village

Explanation:

Global village is a term used to describe how communication between parties that are far apart is done as a result of interconnectivity and advanced media technology.

An individual does not need to travel from New York for example for a meeting, rather meetings can now be done online.

In this scenario Paul checked his e-mail daily and showed his company's website to customers, explaining how the website will help them place orders and receive merchandise more quickly.

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This shrinking of time and space by use of media is referred to as the global village.

4 0
3 years ago
Lucky Louie qualified for a $250,000 mortgage for his new home. The loan application was $400, closing attorney fee $500, apprai
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Answer:

Louie's total cost is $ 7,625.

Explanation:

Closing costs are fees associated with your home purchase that are paid at the closing of a real estate transaction. Closing is the point in time when the title of the property is transferred from the seller to the buyer. In the above question all cost mentioned in question meet defination of closing cost.\

For more info please refer to below given calculation.

Loan application = $ 400

Attorney fee = $ 500

Appraisal fee = $ 400

Title insurance = $ 1200

Doc Fee  = $ 75

Credit fee = $ 50

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