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
Lunker Lures makes ten different models of fishing lures. All ten models are completely crafted by hand using the same basic mat
maria [59]

The type of overhead costing system that would be the best fit for Lunker is: Traditional costing system using design hours as the basis for allocation.

<h3>What is the Traditional Costing System?</h3>

The traditional costing system is a method applied in accounting that aims at determining the cost of production. One driver is assigned as the basis of allocation.

In the case of Lunker Lures above, the driver that is used as the basis of allocation should be design hours.

Learn more about the Traditional Costing System here:

brainly.com/question/24516871

8 0
2 years ago
Polar bears in captivity exhibit obsessive patterns of behavior such as pacing back and forth on the same spot, swinging their h
kherson [118]

Answer:

c. Stressed polar bears exhibit obsessive patterns of behavior.

Explanation:

  • If a polar bear is bred in captivity they show an obsessive pattern of behavior.
  • Such as the passing of the back and forths on the same spot and swimming on their heads from side to side.
  • And also use their paws to repeatedly strike their heads as a sign of stress. This shows that they don't do well in captivity.
5 0
3 years ago
Multiple Choice Is an outflow of cash from the use of a plant asset. Is applied to land. Measures the decline in market value of
azamat

Answer:

Is the process of allocating to expense the cost of plant asset.

Explanation:

Depreciation is an expense indicating a decline in the value of the capital assets due to tear and wear, obsolescence, consumption, time span, etc. It's shown on the income statement debit side. It is a non-cash item which has no effect on the cash balance.

Moreover, it is to charged over the specified number of useful life so that proper amount of the depreciation should be recorded in the books of accounts

5 0
3 years ago
In the united states today, what gives money its value?
BigorU [14]

The value of any money is determined by supplys and demands and the supplys and demands for other goods in the economy

8 0
2 years ago
Read 2 more answers
Kingbird Corporation owns a warehouse. On November 1, it rented storage space to a lessee (tenant) for 3 months for a total cash
Nikitich [7]

Answer:

cash                  2,790 debit

        unearned revene 2,790 credit

unearned revenue 1,860 debit

           rent revenue    1,860 credit

Explanation:

The revenue from the rent is unearned as currently the firm has to provide the rent spance for three months It will be earned as time passes.

At year-end December 31th we have earned 2 months (Nov and Dec) therefore we reocgnize for that amount

2,790 x 2/3 months = 1,860 rent revenue

3 0
3 years ago
Other questions:
  • The president of the united states announces in a press conference that he will fight the higher inflation rate with a new anti-
    7·1 answer
  • Opera Corp. uses dollar-value LIFO method of computing its inventory cost. Data for the past three years is as follows:
    14·1 answer
  • 10 points.............​
    15·2 answers
  • Where would an ecologist be least likely to go to study primary succession?
    13·1 answer
  • To be able to go on the band trip, four band members each get a part-time job. Each person has 5 weeks in which to save his or h
    11·2 answers
  • The OSHA standards for Construction and General Industry are also known as what
    10·1 answer
  • At the beginning of September 2018, Sheffield Company reported Inventory of $7800. During the month, the company made purchases
    8·1 answer
  • If you start investing a little money now you will most likely have a lot more
    7·2 answers
  • a lawnmower manufacturer has the following loss distribution for its annual products liability costs: loss probability 250,000 0
    10·1 answer
  • General Motors (GM) is trying to reinvent the Cadillac brand with new car designs and a new brand story. They commission McCann
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!