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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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yanalaym [24]

Answer:

  • Low supply
  • Scarcity
  • Low economic growth

Explanation:

When suppliers under invest in their business, they will end up having the capacity to only produce less than the market requires. Should this happen, supply will be reduced in the market which would lead to relative scarcity all else being equal.

For economic growth to happen, there must be increasing production in an economy so if suppliers are under investing and production is low, there might be low or no economic growth.

8 0
2 years ago
Baa-rated bonds currently yield 6%, while Aa-rated bonds yield 4%. Suppose that due to an increase in the expected inflation rat
ollegr [7]

Answer: The new confidence index is 0.7143

Explanation: Consumer confidence index which is known as the confidence index is an index used for estimating the economy of the U.S, it is published by the conference board which shows the decree of excitement in peoples's activities on their savings and spendings.

To calculate the new confidence index;

STEP1: Add the bond increase to the current bond;

6% + 1% = 7%

4% + 1% = 5%

STEP 2: FIND THE NEW CONFIDENCE INDEX

5% ÷ 7% = 0.7143

The old confidence index can also be calculated as

4% ÷ 6% = 0.6667

8 0
3 years ago
To build wealth is a gamble; the wealthy people are lucky and become rich overnight. True or false
klasskru [66]

This seems like a rather subjective question. Wealth is built over a lifetime with income. Inheritance is definitely one way to become wealthy, so I would say <u><em>True </em></u>

5 0
3 years ago
The act of influencing others to accomplish an objective is typically seen in which of the following environments? a. Business e
Juli2301 [7.4K]

Answer:

D- All of the above

Explanation:

Edg. 2021, took the test and got 100 percent

3 0
3 years ago
The Southern Corporation manufactures a single product and has the following cost structure: Variable costs per unit: Production
Illusion [34]

Answer:

See below

Explanation:

The computation of carrying value on the balance sheet of the ending inventory of finished goods under variable costing is seen below;

Before that, we have to determine the unit cost

Unit fixed manufacturing overhead = $120,400 ÷ 6,020 units = $20

Then, the difference will be;

= Unit fixed manufacturing overhead × change in inventory in units

= $20 × (6,020 units - $5,920)

= $20 × 100 units

= $2,000 less than absorption costing

7 0
3 years ago
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