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nata0808 [166]
2 years ago
12

A stock currently sells for $25 per share and pays $0.24 per year in dividends. What is an investor's valuation of this stock if

she expects it to be selling for $30 in one year and requires a 15 percent return on equity investments?A) $30.24B) $26.30C) $26.09D) $27.74
Business
1 answer:
Kisachek [45]2 years ago
4 0

Answer:

B) $26.30

Explanation:

To determine an investor's valuation of the stock we must calculate the present value of next year's dividend and selling price:

present value = [dividend / (1 + rate)] + [selling price / (1 + rate)]

present value = [$0.24 / (1 + 15%)] + [$30 / (1 + 15%)] = $0.21 + $26.09 = $26.30

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2 years ago
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8 0
3 years ago
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3 years ago
According to the U.S. Small Business Administration (SBA), to officially count as "small," _____.
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Explanation:

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7 0
3 years ago
What is the money multiplier when the reserve requirement is
Katyanochek1 [597]

Answer:

Money multiplier= 1 / reserve requirement

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3 0
2 years ago
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