Answer: 7.25%
Explanation:
To calculate this we will use the Constant Growth Model of calculating a Stock's price.
The formula is,
P = D1/(r-g),
where,
P is the current price,
D is the next dividend the company is to pay,
g is the expected growth rate in the dividend payment and
r is the required rate of return for the company.
We were given the Dividend Yield and with this can calculate the Stock Price.
The Dividend yield is the Dividend expressed as a percentage of Stock Price.
Making the stock price x with the next dividend at $1.54 we have
1.54 = 0.032x
x = 1.54/0.032
= $48.13
Now that we have the stock price we can plug it into the formula.
We also need to calculate the growth rate. Given that $1.48 was paid and $1.54 will be paid we can say,
g= 1.54 - 1.48
g= 0.06/1.48
= 4.05% is what it will take to grow $1.48 to $1.54
Now we can plug all these into the formula,
Making r the subject we have,
r = D1/P + g
= 1.54/48.13 + 0.0405
= 7.25%
The required rate of return on this stock is therefore 7.25%.
The answer will be true. I hope it is right
Answer:
Annual contributions to the retirement fund will be $6,347.31
Explanation:
First find the Present Value of the Annuity giving payments of $32,000 annually for 25 years at the rate of 10%.
Using a Financial Calculator enter the following data
PMT = $32,000
P/y = 1
N = 25
R = 10%
FV = 0
Thus, the Present Value, PV is $290,465.28
At the time of retirement (in 20 years time) the Value of the annuity fund is $290,465.28.
Next we need to find the Payments PMT to reach this amount in 20 years time at the interest rate of 8%
Using a Financial Calculator enter the following data
FV = $290,465.28
N = 20
R = 8 %
PV = $0
Thus, the Payments, PMT required will be $6,347.3080
Conclusion :
Annual contributions to the retirement fund will be $6,347.31
Answer:
16.16%
Explanation:
The multiplier each week is ...
1 + 15%/52
So the multiplier after 52 weeks is ...
(1 +.15/52)^52 ≈ 1.1615834
This corresponds to an effective annual interest rate of 16.16%.
Answer:
the right to earn income from the good
Explanation:
Property rights is an economic term that emphasis on how a resource can be used and owned. Property rights differentiate various goods on the basis of their ownership and usage. The fourth property right is the right to earn income from a good. It’s a right that allows an individual to sell goods and services and earn money.