I think the answer is D.52
Answer: 8.36%
Explanation:
The growth rate being thrown in there was in an effort to confuse you into using the Dividend Discount Model.
This is a Preferred Stock however and is calculated differently as such,
Net Price = Dividends / rate
Making rate the subject we have,
r = Dividends / Net Price
So plugging in the figures we have,
r = 3/ 35.9
r = 0.08356545961
r = 8.36%
The market required rate of return on your firm's preferred stock is 8.36%.
Answer:
3. It protects up to $250,000 of customer deposits.
Explanation:
Protection of customers deposit as become a necessity due to the bank failure that led to lost of savings by a lot of customers.
The Federal Deposit Insurance Corporation is saddled with the responsibility of protecting customers savings in the event of liquidation of banks and to ensure that no customer suffer loss.
Answer:
The required rate of return is 16%
Explanation:
The constant growth model of the DDM is used whenever the dividends are expected to grow at a constant rate in the future forever. The formula for the constant growth model to calculate the price of the share today is,
P0 = D1 / r-g
Where D1 is dividend next year or D0 *(1+g)
r is the required rate of return
g is the growth rate in dividends
Plugging in the available variables, we can calculate the required rate of return (r).
18.22 = 2.4 * (1+0.025) / r - 0.025
18.22 * (r-0.025) = 2.46
18.22r - 0.4555 = 2.46
18.22r = 2.46 + 0.4555
r = 2.9155 / 18.22
r = 0.1600 or 16.00%
Answer:
B
Explanation:
cuz u need to talk about it as a group