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
In-s [12.5K]
4 years ago
11

The expected return on Natter Corporation's stock is 14%. The stock's dividend is expected to grow at a constant rate of 8%, and

it currently sells for $50 a share. Which of the following statements is CORRECT?
a. The stock's dividend yield is 7%.
b. The stock's dividend yield is 8%.
c. The current dividend per share is $4.00.
d. The stock price is expected to be $54 a share one year from now.
e. The stock price is expected to be $57 a share one year from now.
Business
1 answer:
AysviL [449]4 years ago
7 0

Answer:

d. The stock price is expected to be $54 a share one year from now.

Explanation:

Using dividend discount model(DDM), find next year's dividend;

P0 = D1/ (r-g)

50 = D1/(0.14-0.08)

50 = D1/ 0.06

Multiply both sides by 0.06 to solve for D1;

50 *0.06 = D1

3 = D1

Next, year's dividend is $3

Dividend yield = D1/P0;

= 3/ 50 = 0.06 or 6% hence choices A& B are incorrect.

Next year's price; P1 = P0(1+g)

P1 = 50(1.08) = $54 hence choice D is correct

You might be interested in
A savings account that pays interest every month is said to have a _______ interest period.
LuckyWell [14K]
A savings account that pays interest every month is said to have a quarterly interest period.
3 0
3 years ago
Read 2 more answers
Which group is most likely to utilize a tax advantages instrument such as an ira?
inysia [295]
The small investor is the group that are able to day trade and most likely able to invest across different industries. They also utilize a tax advantages instrument such as IRA. This also a group that would face less red tape.



7 0
3 years ago
The mid-1990s saw a rise in the use of mobile phones in the general population. The technology continued to improve in the early
Ber [7]

Answer:

the cpi has understated the cost of living because of quality improvement bias

6 0
3 years ago
For high school graduation, Ryan’s family is giving him a choice between two presents that are both worth $900. He can choose ei
yulyashka [42]

Answer: The Mexican trip with his best friends

Explanation:

Ryan cannot choose both options and thus has to make a decision of which option to take. Therefore he automatically sacrifices the other option. This type of decision is relevant and is known as a relevant cost. Relevant costs are costs that differ between alternatives, and thus influence the decision that you will make.

Opportunity cost is a type of relevant cost. This is the option that is given up / sacrificed when one option (laptop) is chosen over another (Mexican trip). In this case the opportunity cost is the Mexican trip when the laptop is chosen.

3 0
3 years ago
____ can be defined as the degree to which an obtained measure represents the true level of the trait being measured.
Debora [2.8K]

Answer:

let try validity as the rightful answer.

4 0
3 years ago
Other questions:
  • Lopez Corporation incurred the following costs while manufacturing its product.Materials used in product $129,600 Advertising ex
    15·1 answer
  • Grayson (single) is in the 24 percent tax rate bracket and has sold the following stocks in 2019: (Loss amounts should be indica
    13·1 answer
  • A chess club with 40 members is electing a new president. eric received 22 votes. what percentage of the club members voted for
    6·1 answer
  • The following is selected financial information for Osmond Dental Laboratories for 2021 and 2022: 2021 2022 Retained earnings, J
    7·1 answer
  • Action Shoes is a company that manufactures shoes. It has a lot of competitors in the market. However, it only builds its streng
    14·1 answer
  • regarding references what are some things to keep in mind when creating a reference list for a potential employer
    12·2 answers
  • Marino company is currently selling 10,000 units of its product per month at $10.40 per unit for total monthly sales of $104,000
    10·1 answer
  • On March 31, the end of the first year of operations, Barnard Inc., manufactured 4,300 units and sold 3,700 units. The following
    11·1 answer
  • Petty Cash Fund Entries Journalize the entries to record the following: Check is issued to establish a petty cash fund of $1,200
    6·1 answer
  • 1.4. Explain the role of financial markets in the economy.​
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!