Answer:
$26
Explanation:
according to the constant dividend growth model
price = d1 / (r - g)
d1 = next dividend to be paid
r = cost of equity
g = growth rate
(2.5 x 1.04) / ( 0.14 - 0.04) = $26
Answer: The Evolution of Finance. ... At the core financial institutions all do the same two things: first, they gather assets, and second, they invest those assets. Commercial banks take deposits and make loans. Investment banks identify pools of capital and issue securities. Asset managers take savings and invest those savings.
Explanation:
Answer:
Retained earnings
Explanation:
In simple words, retained earnings refers to the earnings that is left with the company after accounting for all the capital charges, that is, dividends on shares and interest on debt. Opportunity cost refers to loss of profits for choosing the best alternative over the second bet alternative.
Companies retain earnings for the purpose of reinvesting them so they have to bear a lower cost . Hence the retained earnings reflect the opportunity cost for the capital providers as they can earn some return on it if was not retained at first place.
