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
mamaluj [8]
3 years ago
8

Quantitative Problem 1: Hubbard Industries just paid a common dividend, D0, of $1.50. It expects to grow at a constant rate of 2

% per year. If investors require a 8% return on equity, what is the current price of Hubbard's common stock? Do not round intermediate calculations. Round your answer to the nearest cent. $ per share
Business
1 answer:
mr Goodwill [35]3 years ago
7 0

Answer:

The current price of Hubbard's common stock is <u>$25.50</u>.

Explanation:

This can be calculated using the Gordon growth model (GGM) formula that assumes growth is dividend will be constant as follows:

P = D1/(r - g) ............................ (1)

Where,

P = Current stock price = ?

D1 = Next dividend =  D0 * (1 + g) = $1.50 * (1 + 2%) = $1.53

r = required return = 8%, or 0.08

g = growth rate = 2%, or 0.02

Substituting the values into equation (1), we have:

P = $1.53 / (0.08 - 0.02) = $25.50

Therefore, the current price of Hubbard's common stock is <u>$25.50</u>.

You might be interested in
Veronique and lily each bought a piece of luggage that had the same price in different stores. the table below shows how they wi
myrzilka [38]

According to the information in the Graph Veronique made a better decision than Lily because the final cost of her purchase is lower including finance charges (option B)

<h3>What is a finance charge?</h3>

A finance charge is an economic term that refers to additional charges made by finance companies (such as banks) to a transaction we make, such as a purchase.

In the case of Veronique and Lilly, they both bought the same suitcase with different prices. However, the better financial decision was Veronique's because she paid less ($25) for the same bag including finance charges.

While Lilly, despite having fewer fees, will have to pay $10 more than Veronique.

Note: This question is incomplete because the image is missing. Here is the image.

Learn more about payment in: brainly.com/question/15138283

5 0
1 year ago
The AUD/$ spot exchange rate is AUD1.60/$ and the SF/$ is SF1.25/$. The AUD/SF cross exchange rate is _____. Group of answer cho
DaniilM [7]

Answer:

a. $1.2800

Explanation:

The AUD/SF cross exchange rate is as computed below:

==> AUD/$ ÷ SF/$

==> $1.60 / $1.25

==> $1.2800

So, the AUD/SF cross exchange rate is $1.2800

6 0
2 years ago
External costs are those costs: Multiple Choice that fall directly on an economic decision maker. that fall indirectly on an eco
Maksim231197 [3]

Answer:

The correct option is D

Explanation:

External cost is the form of an expense which occur while consuming or producing the goods and services that imposes the cost or expense ( with negative effect) on the third party.

If there are the external costs while consuming the good, then the social costs would be greater than the private cost.

So, the external cost is defined as the cost that is imposed without any compensation on someone other than the person who cause or incur it.

7 0
2 years ago
On October 1, Black Company receives a 6% interest bearing note from Reese Company to settle a $20,000 account receivable. The n
Ivanshal [37]

Answer:

B. $300

Explanation:

The interest revenue is computed below:

= Principal × rate of interest × number of months ÷ (total number of months in a year)  

= $20,000 × 6% × (3 months ÷ 12 months)

= $300

The 6 months is calculated from October 1 to December 31

Simply we use the simple interest formula by considering the principal amount, rate of interest and time period so that the correct revenue can be computed

7 0
3 years ago
Wember Catering uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports. The
Sever21 [200]

Answer:

The catering supplies in the planning budget for September would be closest to $3,200

Explanation:

In order to calculate the the catering supplies in the planning budget for September we would have to use the following formula:

catering supplies in the planning budget=The cost formula for catering supplies+cost per job×number of jobs+cost per meal×number of meals

catering supplies in the planning budget=($400+$90*15+145*$10) = $3,200

The catering supplies in the planning budget for September would be closest to $3,200

7 0
3 years ago
Other questions:
  • In general, managing global operations is made easier by __________ and __________.
    10·1 answer
  • Many depressants, including alcohol, reduce your __________.
    14·1 answer
  • What is a common association detection analysis technique where you analyze certain items to detect customers' buying behavior a
    6·1 answer
  • Secured debt means a lender gives you money in exchange for what?
    6·1 answer
  • Why do monopolies engage in price discrimination when possible? Enumerate and explain the nature of possible impediments to pric
    14·1 answer
  • What is the need of entrepreneurship​
    8·1 answer
  • Question 3 of 10
    5·1 answer
  • At an annual effective interest rate of 6.3%, an annuity immediate with 4N level annual payments of 1,000 has a present value of
    14·1 answer
  • Which action would a bank most likely take when deciding whether a person
    11·1 answer
  • Allen’s ark sells 2000 canoes per year at a sales price of 460
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!