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serg [7]
3 years ago
11

Suppose you know that a company’s stock currently sells for $56 per share and the required return on the stock is 10 percent. Yo

u also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield. If it’s the company’s policy to always maintain a constant growth rate in its dividends, what is the current dividend per share?
Business
1 answer:
Elenna [48]3 years ago
5 0

Answer:

$2.8 divdends per share

Explanation:

$56 market price

Rate of return 10%

The gain for an investment in stocks is:

\frac{DividendsYield+SharePriceVariation}{Investment} = $Return on Investemnt

In this case we are told that this is distribute evenly, this means:

dividends paid = market price gain

So dividends yield 5% and market price yields another 5% to achieve the 10%

So currently $56 market price x 0.05% = $2.8 divdends per share

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A supply schedule shows the quantities that suppliers are willing to sell in the market at different prices. It is a table format with quantity on one column and prices on another. As per the law of supply, high prices lead suppliers to supply more at the market.

The supply schedule illustrates in a table format the relations between the price and the quantity supplied. It will show how the quantity increase as prices increases. The supply schedule is a tabular representation of the supply curve.

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Suppose that Jack and Sophia and Hal enter into an agreement for the sale of the business without the non-competition agreement.
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