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Fittoniya [83]
3 years ago
7

Gamma Corp. is expected to pay the following dividends over the next four years: $5, $12, $18, and $1.80. Afterward, the company

pledges to maintain a constant 4 percent growth rate in dividends, forever. If the required return on the stock is 14 percent, what is the current share price?
Business
1 answer:
Vikentia [17]3 years ago
5 0

Answer:

The current share price is  $37.49(appx)

Explanation:

Consider the following calculations

current share price

= 5/(1+0.14) +12/(1+0.14)^2 + 18/(1+0.14)^3+1.8/(1.0.14)^4+1.8/(0.14-0.04)*(1+0.14)^4

=4.386+9.233+12.15+1.065+10.657

=$37.49 (appx)

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what I think is that it should decrease by 50%

Explanation:

why do I think that I think that because every one needs a discount

8 0
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In a period of rising prices, the inventory method that produces the lowest ending inventory is the:
Dmitry [639]

Answer:

LIFO Periodic method

Explanation:

The LIFO means Last In First Out this means that item that have been stocked today would be sold first although there’s still some inventory from previous periods.

Using LIFO would result in lower ending inventory because closing inventory would be valued at low price which they had been bought assuming that there’s now a hick in price and goods in the warehouse were stocked when prices were low.

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Why is the relational approach to leadership useful for leading sustainability in an organisation? Please indicate 3 reasons.
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Answer:

The understanding including its context has been explained throughout the explanation segment elsewhere here.

Explanation:

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4 0
3 years ago
Consider the market for pens. Suppose that increased medical concerns over lead pencils have led schools to steer away from penc
LiRa [457]
Answer: False

Explanation:
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4 0
3 years ago
You own a portfolio that is 31 percent invested in Stock X, 46 percent in Stock Y, and 23 percent in Stock Z. The expected retur
MrRa [10]

Answer: 13.53%

Explanation:

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6 0
3 years ago
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