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Rudiy27
3 years ago
13

ConsGrough, Inc. has increased its annual common dividend by 3% in each of the years that the company has existed. If you believ

e that the company can continue to do so indefinitely, then what price would you be will to pay for ConsGrough if the required rate of return is 6% and the dividend that it paid yesterday was $5?
Business
1 answer:
Salsk061 [2.6K]3 years ago
8 0

Answer: $171.67 would be the price of the security

Explanation: This problem relates to dividend growth model, which can be shown as follows :-

=\frac{D_{1}}{P_{0}}+\:G

where'

d1 = expected dividend

p = price

g = growth rate

therefore,

=\frac{\$5\left ( 1+3\% \right )}{P_{0}}+\:3\%

solving this we get

p_0=\$171.67

You might be interested in
Granfiield Corporation manufactures two​ products, Product A and Product B. The following information was​ available: Product A
Rainbow [258]

Answer:

D. ​10,400 units of A and none of B

Explanation:

product A

contribution margin = $41 - $32

                                 = $9

product B

contribution margin = $29 - $19

                                 = $10

at full capacity:

contribution for product A = 10400*$9

                                            = $93600

contribution for product B = 5900*$10

                                            = $59000

Since the contribution is higher for product A, The company should produce 10400 units of product A and none of B.

4 0
3 years ago
Suppose that in January there were 5,000,000 workers in the labor​ force, with 4,670,000 employed and 330,000 ​unemployed, imply
WINSTONCH [101]

Answer:

6.29%

Explanation:

The computation of the unemployment rate for the month of February is shown below:

Unemployment rate = Number of people unemployed ÷ Labor force

= 325,000 ÷ 5,170,000

= 6.29%

It is always shown in percentage form

Plus it is a ratio between the number of people unemployed and the labor force

Hence, all other information is not relevant. Therefore, ignored it

4 0
3 years ago
Between 1916 and​ 2016, the average growth rate of real GDP per person in the United States was 2 percent a year. Complete the s
Phantasy [73]

Answer:

The correct answer is real​ GDP; the population.

Explanation:

Real GDP refers to the total value of goods and services produced by a country, without taking into account the inflation that occurred in the respective period.

Real GDP is equal to deflated nominal GDP according to the increase in the consumer price index [CPI].

In this way, the distortion caused by inflation is eliminated, especially when inflation is very high, since the only increase in the prices of goods and services can inflate GDP, without actually producing an effective increase in production. national.

The GDP will have effectively increased when its increase is greater than the increase in the prices of the goods and services that comprise it.

6 0
3 years ago
. [5 pts] A life-saving medicine without any close substitutes will tend to have a. a small elasticity of demand. b. a large ela
Anna007 [38]

Answer:

The correct answer is the option A: a small elasticity of demand.

Explanation:

To begin with, the concept known as<em> "price elasticity of demand"</em> refers to the relationship that shows how much the quantity demanded of a product will change when the price of it changes. And therefore that it indicates the variation that exists between the price and the quantity demanded for the product.

Secondly, when it comes to products that are highly essential to life, like water, the price elasticity of its demand will be inelastic or what is the same as small elastic due to the fact that it does not matter how much the price changes, the amount demanded by the consumers will stay due to the fact that the product is highly needed in their lives.

8 0
4 years ago
In general, what kind of people earn the most money? (5 points)
sashaice [31]

In general, what kind of people earn the most money?

People with skills that are in high demand but low in supply

5 0
2 years ago
Read 2 more answers
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