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Evgen [1.6K]
4 years ago
9

Creme Bakery just paid an annual dividend of $2.20 a share and is expected to increase that amount by 2.2 percent per year. If y

ou are planning to buy 1,000 shares of this stock next year, how much should you expect to pay per share if the market rate of return for this type of security is 14 percent at the time of your purchase?
Business
1 answer:
alekssr [168]4 years ago
7 0

Answer:

$19.47

Explanation:

The computation of the price paid for share is shown below:

= Year second dividend ÷ (Required rate of return - growth rate)

where,

Next year dividend is

= $2.20 + $2.20 × 2.2%

= $2.20 + $0.0484

= $2.2484

In the year 2 , it is

= $2.2484 × 1.022

= $2.2978648

And, the required rate of return is 14%

Plus the growth rate is 2.2%

So, the price paid for the share is

= ( $2.2978648) ÷ (14% - 2.2%)

= $19.47

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Travka [436]

A risk management differs from quality management because the risk management identifies areas of operational and financial loss.

<h3>What is a risk management?</h3>

This refers to the layer of protection at the beginning of the process to identify hazards before production even begins.

<h3>What is quality management?</h3>

This is the section involved in overseeing all activities that must be accomplished to maintain a desired level of excellence in a firm.

In conclusion, the risk management differs from quality management because the risk management identifies areas of operational and financial loss.

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3 0
2 years ago
Authorized and available shares Aspin​ Corporation's charter authorizes issuance of 2 comma 700 comma 000 shares of common stock
Mama L [17]

Answer:

$1,200,000

Explanation:

The computation of the maximum number of new shares of common stock is shown below:

= Total authorized shares - total outstanding shares

= $2,700,000 - $1,500,000

= $1,200,000

We simply subtract the total outstanding shares from the total authorized shares, so that the maximum number of shares could find out.

All other information which is given is not relevant. Hence, ignored it

4 0
3 years ago
Question 1 unsaved households comprising of single, separated, widowed, and divorced individuals generally demand larger apartme
Zanzabum
Whats the question.
7 0
3 years ago
You expect General Motors​ (GM) to have a beta of 1.3 over the next year and the beta of Exxon Mobil​ (XOM) to be 0.9 over the n
Temka [501]

Answer:

As the beta of GM (1.3) is more than that of XOM (0.9), GM has more systematic risk than XOM.

The volatility of GM (40%) is higher than that of XOM (30%). Thus, GM has a higher total risk than XOM.

Explanation:

The systematic risk is the risk caused by factors that affect all of the market and are unavoidable. Such a risk is also known as a market risk and is measured by the beta of a stock. The market beta is always 1. A stock having a beta higher than 1 has higher systematic risk than market and a stock having a lower beta than 1 has a lower systematic risk than the market.

As the beta of GM (1.3) is more than that of XOM (0.9), GM has more systematic risk than XOM.

Total risk, on the other hand, is the risk that comprises of both systematic and unsystematic risk. The systematic risk is the market risk as mentioned above while the unsystematic risk is the firm specific risk and is avoidable. The total risk is measured by the standard deviation or volatility of the stock. The stock with higher volatility has higher total risk and vice versa.

The volatility of GM (40%) is higher than that of XOM (30%). Thus, GM has a higher total risk than XOM.

8 0
4 years ago
What type of business are most of the 25 million businesses in this country?​
Arte-miy333 [17]

Answer: The answer is <u>Small businesses. </u>

Explanation:

According to the SBA, small businesses makes up 49.2% of all employment in the U.S. Also, 99.7% of U.S employers are from a small business. A small business is classified as a business with having less than 500 employees. A few types of small businesses are home-based, franchises, and cooperations.

7 0
3 years ago
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