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
Sati [7]
3 years ago
10

What is the stock price per share for a stock that has a required return of 16%, an expected dividend $2.7 per share, and a cons

tant growth rate of 10%
Business
1 answer:
Anit [1.1K]3 years ago
3 0

Answer:

Price of stock = $49.5

Explanation:

<em>The Dividend Valuation Model(DVM) is a technique used to value the worth of an asset. According to this model, the value of an asset is the sum of the present values of the future cash flows would that arise from the asset discounted at the required rate of return. </em>

If dividend is expected to grow at a given rate , the value of a share is calculated using the formula below:  

Price of stock=Do (1+g)/(k-g)  

Do - dividend in the following year, K- requited rate of return , g- growth rate  

DATA:

D0- 2.7

g- 10%

K- 16%

Price of stock = ( 2.7×1.1)/(0.16-0.1) = 49.5

Price of stock = $49.5

You might be interested in
Which of the following best describes how auto insurance companies manage risk
vfiekz [6]
<span>Which of the following best describes how auto insurance companies manage risk? Auto insurance companies will charge rates based on what they think is appropriate in regards to how likely you are to file a claim. They take into account many factors that will relate to filing a claim in the future and what you have done in the past. By evaluating these, they are determining the risk and how to manage it. </span>
6 0
3 years ago
Last year mike bought 100 shares of dallas corporation common stock for $53 per share. during the year he received dividends of
Ronch [10]
Last year mike bought 100 shares of Dallas corporation common stock for = $53 per share
he received this year dividends of = $1.45 per share
stock is currently selling for = $60 per share
rate of return = ?
capital yield %= (60 - 53 / 53) x 100 = 0.132  x 100 = 13.2%
dividend yield % = (1.45 / 53) x 100 = 0.0273 x 100 = 2.73%
Total yield or rate of return will be = 13.2 + 2.73 = 15.94 %
7 0
3 years ago
You would like to know the minimum level of sales that is needed for a project to be accepted based on its net present value.
Andrei [34K]

Answer:

C. financial break-even point.

Explanation:

Break even point in economics is the point in the business, wherein cost and revenue generated are equal and business make no profit, no loss. Similary Financial break even has a same concept, however, it is a point in business, wherein earning before EBIT is equal to the fixed financial cost of the company and these fixed costs should be earned by the company to run its business and meet its fixed financial obligation. The earning above the financial break-even point is a profit to the shareholder.

Point in financial break even, wherein earning per share is equal to zero.

8 0
3 years ago
Industry-level strategy is a corporate strategy that addresses the question "how should we compete against a particular firm in
Alik [6]
The answer is false.
8 0
3 years ago
Bhakti was recently promoted to a sales management position. She had been an effective representative, but her strengths and edu
KonstantinChe [14]

Answer:

A is the correct answer.

Explanation:

Sales managers are important for improving a company's revenue. Their job is to create a high-performance sales team and achieve revenue forecasts. Sales managers can improve the quality of their employees. A good manager who gets average salespeople knows how to coach, motivate and advise the salespersons, but for improving the managers would have to know what the salesperson would be doing and what are their traits and abilities job candidates will have to success.

6 0
3 years ago
Other questions:
  • In 2009 and 2010 Toyota had to recall millions of automobiles due to uncontrollable acceleration. This recall forced upper-level
    7·1 answer
  • Overhead cost variance is: Multiple Choice The difference between the actual overhead incurred during a period and the standard
    12·1 answer
  • Cantor Corporation acquired a manufacturing facility on four acres of land for a lump-sum price of $8,500,000. The building incl
    6·1 answer
  • Financial accounting should provide information that:_______.
    13·1 answer
  • Using the continuous-debt method of setting your debt limit, you should be able get completely out of debt (other than your mort
    14·1 answer
  • Break-even sales and sales to realize operating income For the current year ended March 31, Cosgrove Company expects fixed costs
    14·1 answer
  • 4.Over the last six years the shares of company XYZ's stock had returns of 18 percent, 18 percent, 15 percent, -4 percent, 15 pe
    6·1 answer
  • What does a future value measure
    11·1 answer
  • How personality affect on performance of company
    7·2 answers
  • Keeping an open mind and seeing potential good in others are behaviors considered in this element of dialogue
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!