What is the total return for a stock that currently sells for $100, pays a dividend in one year of $2, and has a constant growth rate of 8 percent?
Total return will be 10%.
What is total return?
The overall return is shown as a proportion of the initial investment. For instance, a total return of 20% signifies that the asset's value increased by 20% overall as a result of price growth, dividend payments (if the security is a stock), coupon payments (if the security is a bond), or capital gains (if a fund).
R = 10%
10% is the total return for a stock that currently sells for $100, pays a dividend in one year of $2, and has a constant growth rate of 8 percent.
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<span>The contractor can collect from the estate only. The contractor and Clay made an agreement only in oral form, not in written agreement. So, the contractor could not got after Clay. </span>
<span>Individual shareholders will have the right to
receive dividends declared. They can sell their shares and have the right to
purchase issued shares. They can vote on the directors nominated by the board.
They also have the right to the remaining assets after liquidation. </span>
Answer:
D. 9.44%
Explanation:
The computation of the weighted average cost of capital is shown below:
Weighted average cost of capital is
= Cost of debt × (1 - tax rate) × weight of debt + cost of equity × weight of equity
= 8% × (1 - 0.30) × 40% + 12% × 60%
= 2.24% + 7.2%
= 9.44%
Hence, the weighted average cost of capital is 9.44%
Therefore the right option is D.
A purchasing department may have difficulty getting a product quickly as it may not be readily available so may have to wait for it and also, there may be a problem getting a product at a reasonable price which means the purchaser would have to search elsewhere for it which could take time.
