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Anestetic [448]
2 years ago
11

Albright Motors is expected to pay a year-end dividend of $3.00 a share (D1 = $3.00). The stock currently sells for $30 a share.

The required (and expected) rate of return on the stock is 16 percent. If the dividend is expected to grow at a constant rate, g, what is g?
Business
1 answer:
Viefleur [7K]2 years ago
3 0

Answer: 14.4%

Explanation: The G that we are computing in this question is the sustainable growth rate, it is the growth rate that a company can attain and maintain without any problem.

we know that,

growth = (retention ratio)*(return on equity)

growth = (1- dividend payout ratio)*(return on equity)

growth\:=\:\left ( 1-\frac{3}{30} \right )*\left ( 0.16 \right )

growth = 14.4%

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pantera1 [17]

Answer:

Effect on income= 50*50= $2,500 increase

Explanation:

Giving the following information:

Model 26 has sales of 150 units with a contribution margin of $50 each.

To calculate the effect on income, we need to use the following formula:

Effect on income= number of units*unitary contribution margin

Effect on income= 50*50= $2,500 increase

3 0
2 years ago
In basing a credit decision on the applicant's income, the credit extender must consider alimony, child support, and maintenance
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7 0
3 years ago
(a) how are bonds rated? (b) how are these rating helpful to the investors?​
Jet001 [13]

Answer:

a) Bond rating is done by evaluating and considering all the relevant internal as well as external factors associated with the financial status of a business.

b) Bond rating helps in analysing the risk associated with the bond by analyzing its credit quality and thus helps investors taking decisions related to their investments.

Explanation:

a) Bond-rating is the letter grading system that is used to indicate the quality of the credit-related to the bond of various organizations. Bond-rating is done by evaluating and considering all the relevant internal as well as external factors associated with the financial status of a business. Internal factors may include the financial strength of the organization. External factors may include various networks with interested investors and other government organizations and policies related to the same.

There are three important agencies that analyze the credit quality of a bond. These agencies are Standard & Poor's, Moody's, and Fitch rating Inc.

b) Bond-rating help in analyzing the risk associated with the bond by analyzing its credit quality and thus helps investors taking decisions related to their investments. It helps the investors to study the stability and quality of a bond. Hence, higher-rated bonds are considered to be more stable and appropriate for investment purposes.

7 0
3 years ago
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maks197457 [2]

Answer:

the fixed dollar-pound exchange rate is consistently below the equilibrium exchange rate that would be produced by a private foreign exchange market.

Explanation:

Fixing an exchange rate means that the government is trying to intervene in valuation of its currency. It is fixing it's currencie's rate to another and using reserves to handle fluctuations in market price.

When the fixed rate is below equillibrum there is surplus of the countrie's currency at the fixed rate. The government will buy this surplus (if not the value will fall) by selling their foreign currency reserves. This is done to maintain the fixed exchange rate.

Reduced reserves of pounds noticed by the Central bank is as a result of fixed price below equilibrium.

5 0
3 years ago
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Answer:

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3 0
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