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andreyandreev [35.5K]
4 years ago
10

A common stock pays an annual dividend per share of $1.80. The risk-free rate is 5 percentand the risk premium for this stock is

4 percent. If the annual dividend is expected to remain at$1.80 per share, what is the value of the stock?A. $17.78B. $20.00C. $40.00D. None of the above
Business
1 answer:
lilavasa [31]4 years ago
3 0

Answer:

B. $20.00

Explanation:

To calculate the intrinsic value of a paying dividends stock we use the Gordon Growth Model. PV = D1 / (k +g). In this case, the dividend is not going to experience any growth (g) therefore g=0 And D1 =D0 Which equals 1.8. K is the expected rate of return which is calculated adding the risk premium and risk- free rate. K=5% + 4%=9%.

PV = 1.8 / 0.09

PV = 20.00

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3 years ago
Match the following terms to the correct definition. The maximum expected output capability of a resource or system. An approach
tamaranim1 [39]

Answer:

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3 years ago
On August 1, Batson Company issued a 60-day note with a face amount of $52,200 to Jergens Company for merchandise inventory. (As
blsea [12.9K]

Answer:

a.

$52,200

b.

$51,156

Explanation:

Note are issued n the face value or the discounted value. When price of the note is the same as face value then it is known as issued on par/face value.

When price of the note is the lower as face value then it is known as issued on discounted value.

a.

Proceeds from the note issued is the price of the note at which it is issued. As the note is issued on the face value of $52,200, so the proceeds is the same value.

b.

Discount value = $52,200 x 12% x 60/360 = $1,044

Proceeds = Face value of the note - Discount on the note = $52,200 - $1,044 = $51,156

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3 years ago
A machine tool company that estimates the market potential for its wood lathe by identifying all potential buyers of wood lathes
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Dan wants to create a report that contains all fields from a table. Which option on the create tab should he utilize?
puteri [66]

Answer:

Blank Report

Explanation:

4 0
3 years ago
Read 2 more answers
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