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
torisob [31]
3 years ago
15

What is the price of a share of common stock that has an expected dividend of $3.00, a tax rate of 30%, a required return of 15%

, an expected growth rate of 5%, and a beta of 2.0?A. $6.00B. $3.00C. $30.00D. $15.00
Business
1 answer:
Semmy [17]3 years ago
3 0

Answer:

Current price of the share common stock will be $30

So option (c) will be correct answer

Explanation:

We have given expected dividend D_1=$3

Required rate of return = 15 % = 0.15

Tax rate = 30 %

Growth rate = 5 %

Beta = 2

We have to find the price of the share

Price of the share is given by p_0=\frac{D_1}{R_E-g}=\frac{3}{0.15-0.05}=$30

So current price of the share stock will be equal to $30

So option (C) will be correct answer

You might be interested in
When its sales were declining, canadian airline conducted a marketing survey to understand the expectations of the business trav
Montano1993 [528]

Answer:

The correct answer would be, The Canadian Airline would have used Lost Customer Recovery Strategy.

Explanation:

When the sales of the Canadian Airline declines, they surveyed their target market which is Business Class Travelers. From the responses of the customers, they found out that customers feel bounded by the staff of the airplane. They think that they were totally controlled by the staff on board.

Now if the Canadian Airline would have surveyed their former customers, then they would have known why they left their airline, and what was their concerns and what they want in this airline; then the strategy used by them would have Lost Customer Recovery Strategy.

7 0
3 years ago
Consider the following information for three stocks, A, B, and C. The stocks' returns are positively but not perfectly positivel
Dmitry_Shevchenko [17]

Answer:

a) Portfolio ABC's expected return is 10.66667%

Explanation:

The expected return is based on the risk factor of a project. If a project has higher risk its rate of return will be higher. Portfolio ABC has one third of its funds invested in each stock. The return of on A and B are 20% and 10%. Their beta is 1.0 for both the stocks while stock C has beta 1.4. The portfolio expected return will be 10.66667%.

5 0
3 years ago
More than 99% of all U.S. firms are classified as small businesses, and they employ about half of private workers. A small busin
V125BC [204]

Answer:

A

Explanation:

5 0
3 years ago
The most helpful kind of business and why?
agasfer [191]

Answer:

Hair Salon

Explanation:

An hair salon is the most helpful kind of bussiness besides chothing store's because your helping people with their hair and geting a lot of money from doing a curtain style.

5 0
2 years ago
A portfolio manager has a large position in the preferred stock of XYZ Corporation. The manager is concerned that market interes
Ksivusya [100]

Answer:

To hedge the preferred stock position, the manager should: Buy tyx calls

Explanation:

When market interest rate rise preferred stock drop. To hedge using interest rate index option, <em>the contract must offer an offsetting profit during a period of rising interest rates. Therefore buy TYX calls. </em>These will continue to give ever increasing profit as market interest rate continue to rise. And it will offset the ever increasing loss that would be incurred on the XYZ preferred stock position as the market interest rate continues rising.

The hedge is that Any loss on preferred stock position would be offset by corresponding gain on the long interest rate index call position.

5 0
2 years ago
Other questions:
  • Jamie is a 47-year-old accountant who has worked for a large software firm for more than 25 years. His performance during this t
    6·1 answer
  • The two-step process of reporting includes
    5·1 answer
  • If you lose your ATM card and the person who finds it withdraws money from your account, you will lose no more than $50 from you
    5·1 answer
  • 3. A worker within the middle income class is preparing to retire. In the year before he retired, his gross monthly earnings are
    7·1 answer
  • Jeremiah Restoration Company completed the following selected transactions during January: Jan. 1. Established a petty cash fund
    9·1 answer
  • The subject matter expert in an e-learning learning program is one who pays the project bills, coordinates activities of writers
    13·1 answer
  • What questions should someone ask themselves before taking a job?<br><br> what is your answers.
    13·2 answers
  • The price a property will bring when neither the buyer nor the seller is acting under duress and it has been on the market for a
    12·1 answer
  • During January, Luxury Cruise Lines incurs employee salaries of $3 million. Withholdings in January are $229,500 for the employe
    9·1 answer
  • What is bad customer service ? with example​
    9·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!