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Pachacha [2.7K]
3 years ago
12

Stagnant Iron and Steel currently pays a $9.55 annual cash dividend (D0). They plan to maintain the dividend at this level for t

he foreseeable future as no future growth is anticipated. If the required rate of return by common stockholders (Ke) is 13 percent, what is the price of the common stock
Business
1 answer:
denis-greek [22]3 years ago
3 0

Answer:

The price of the common stock today is $73.46

Explanation:

The stock is a zero growth stock which means that the dividend has zero growth. For such a stock, the price or fair value is simply calculated just like the value of a perpetuity. The formula to calculate the price of a zero dividend growth stock is,

P0 = D/Ke

Where,

  • Po is the price or fair value of the stock today
  • D is the dividend paid today which will remain constant
  • Ke is the required rate of return on such a stock

Thus,

P0= 9.55 / 0.13

P0 = $73.46

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Manila Water, the provider of the water and sewerage services in the capital of the Philippines has purchased the government-own
BabaBlast [244]

Answer:

Planning

Explanation:

Planning can be defined as what is needed and required to achieve a desired goal because PLANNING is the first and foremost activity often needed to achieve a desired goal or results reason been that PLANNING involves the creation as well as the maintenance of a plan and it helps to achieve objectives which is why every organization or company always has certain objectives in which they keep on working hard to fulfill these goals and objectives which in turn helps the organization to achieve their aims.

Therefore based on the information given about Manilla water the development, maintenance, and allocation of resources to achieve its goal will require PLANNING.

5 0
3 years ago
Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand
defon

Answer:

Explanation:

Fixed costs - will remain similar no matter of output amount

Variable costs - vary with the change in output

Average cost=(Fixed cost(FC) + Variable cost(VC))/number of units produced

VC = VC per cup of coffee served *cup of coffee served in a week

Total Cost(TC)= FC+VC

Average cost=TC/Cup of coffee served in a week

1. Let's calculate for 2000 cups of coffee:

FC remain the same! = $1200

VC=0.22*2000= $440

TC=FC+VC= 1200+440= $1640

Average cost of 1 cup of coffee= TC/#of cups=1640/2000=$0.82

2. Calculation for 2100 cups:

FC=1200

VC=0.22*2100=462

TC=1200+462=1662

Av cost=1662/2100=0.79

3. Calculation for 2200 cups:

FC=1200

VC=0.22*2200=484

TC=1200+484=1684

Av cost=1684/2200=0.77

As the number of cups increased from 2000 to 2100, the average cost per cup devreased 0.82 to 0.79. Then when number of cups increased to 2200, average cost decreased to 0.77. The reduction is due to the variable cost

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3 years ago
Congress passed a law imposing penalties for displaying "indecent" material online where children could see it. If the U.S. Supr
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Answer:

TRUE

Explanation:

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4 years ago
Which of the following is correct?a. The GDP deflator is better than the CPI at reflecting the goods and services bought by cons
kap26 [50]

Answer:

A) The GDP deflator is better than the CPI at reflecting the goods and services bought by consumers.

Explanation:

The GDP deflator measures the change in prices of all finished goods and services produced within an economy in a given year.

The CPI, on the other hand, measures the change in the price of a selected basket of goods and services, that corresponds with those that are most often bought by citizens, but is limited anyways in scope.

Therefore, we can safely conclude that the GDP deflator is a more comprehensive measure, even if it's used less frequently than the CPI.

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