1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
rewona [7]
3 years ago
8

A7X Corp. just paid a dividend of $2.80 per share. The dividends are expected to grow at 20 percent for the next eight years and

then level off to a growth rate of 5 percent indefinitely. If the required return is 13 percent, what is the price of the stock today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Business
1 answer:
kifflom [539]3 years ago
6 0

Answer:

The price of the stock today=$560

Explanation:

We can use the expression for calculating the required rate of return to calculate the price of the stock today:

RRR=(EDP/SP)+DGR

where;

RRR=required rate of return

EDP=expected dividend payment

SP=share price

DGR=dividend growth rate

In our case:

RRR=13%=13/100=0.13

EDP=$2.80 per share

SP=unknown

DGR=20% and 8%, the average DGR=(20+5)/2=12.5%=0.125

replacing in the original expression;

0.13=(2.8/SP)+0.125

2.8/SP=0.13-0.125

2.8/SP=0.005

SP=2.8/0.005

SP=$560

The price of the stock today=$560

You might be interested in
Explanation of the fair trade logo​
inn [45]

~Hello There!~

The fair trade logo means that the cost of the product provides a fair living wage for the workers that produced/created the items.

Hope This Helps You!

Good Luck :)

Have A Great Day ^_^

- Hannah ❤

5 0
3 years ago
Pros and cons on outdoor advertising
Mademuasel [1]
If I'm correct-- by outdoor advertising do you mean commercials and ads encouraging people to go outside?
7 0
3 years ago
An investigator conducting a study of a medical device under an ide is required to complete and sign
Anika [276]

An investigator conducting a study of a medical device under an ide is required to complete and sign an investigator's agreement. It is a statement of the investigator's commitment to conduct the investigation in accordance with the agreement, the investigational plan, the IDE and other applicable FDA regulations, etc., it also supervise all testing of the device involving human subjects, and ensure that the requirements for obtaining informed consent are met.

8 0
3 years ago
Jensen Company has a contribution margin ratio of 45%. This means that its variable costs are 55% of sales. True False
Sergeeva-Olga [200]

Answer:

Jensen company has a contribution margin ratio of 45%. This means that its variable costs are 55% of sales.

This statement is true

Explanation:

Contribution margin ratio is the ratio of contribution to sales. Since the contribution margin ratio is 45%, it implies that variable costs are 55% of sales.

5 0
3 years ago
A ____ calculator allows you to calculate the monthly payments on a house you are looking to buy.
Len [333]
The answer is a Mortgage Calculator.
3 0
3 years ago
Other questions:
  • Select the correct text in the passage. Which sentence in the passage shows hazards that an office worker is likely to face? Owe
    12·1 answer
  • Maria is training for a triathlon, a timed race that combines swimming, biking, and running.Consider the following sentence: Bec
    14·1 answer
  • What is the difference between a prepaid tuition plan and a college savings plan?
    15·2 answers
  • Martha Beyerlein Company incurred $150,000 of research and development costs in its laboratory to develop a patent granted on Ja
    11·1 answer
  • Under the _____, employers can be liable for current pay differences that are a result of discrimination that occurred many year
    10·1 answer
  • Billy owes a liquidated debt of $3,000 to Rayna, his personal weight trainer. Billy sends Rayna a check for $300 on which he has
    15·1 answer
  • Ginny Paulson was just promoted to marketing manager for her company. She also gets a big raise with the promotion. Because Ginn
    5·1 answer
  • When a user sends a reply to a message, what is the user sending
    8·2 answers
  • Sylvia is a budget analyst for the state of Kentucky. her job is to look over the state government's spending and suggest and su
    13·1 answer
  • Scott Company had sales of $12,350,000 and related cost of goods sold of $7,500,000. Scott provides customers a refund for any r
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!