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
tankabanditka [31]
3 years ago
11

1) Michael's, Inc., just paid $1.95 to its shareholders as the annual dividend. Simultaneously, the company announced that futur

e dividends will be increasing by 4.3 percent. If you require a rate of return of 8.5 percent, how much are you willing to pay today to purchase one share of the company's stock? 2PTS
Business
1 answer:
Marizza181 [45]3 years ago
5 0

Answer:

Price we are wiling to pay = $46.429

Explanation:

Hi, this can be calculated using the dividend discount model

Stock price we are willing to pay  = D / (r - g) where,

D = Dividend

r = required rate of return of investor

g = growth

So working the formula gives us,

Price = 1.95 / (0.085 - 0.043)

Price = $46.429

This is the price we are willing to pay.

Hope that helps.

You might be interested in
Which factor should influence the organizational pattern you choose? a. your number of section headings b. all responses are cor
FinnZ [79.3K]

Organizational pattern here refers to a way of organization written document. There is numerous type of these, depending on the type of document you are making. Some examples include topical pattern, where you write your document by starting with a description of the topic you are presenting, to causal pattern, where you present your writing in order to explain how a phenomenon occurs and why it happened in such a manner.

Thus, the best answer for the given question is (C) your readers’ expectations.

7 0
3 years ago
What does the regulation discussed in this section protect?
PtichkaEL [24]

Answer: May you give more details? It’s really hard to explain without no details.

Explanation:

.

4 0
3 years ago
The prepaid insurance account had a beginning balance of $6,600 and was debited for $2,300 for premiums paid during the year. Jo
____ [38]

Explanation:

The adjusting entry is as follows

Insurance expense A/c Dr  $4,800

           To Prepaid insurance A/c  $4,800

(Being the insurance expense is recorded)

The computation is shown below:

= Beginning balance + debited amount - unexpired insurance amount

= $6,600 + $2,300 - $4,100

= $4,800

So while preparing the adjusting entry, we debited the insurance expense account and credited the prepaid insurance account

8 0
3 years ago
T-Bills are a security whose price can vary in the market where they are bought and sold after they are auctioned to the investi
natka813 [3]

Answer:

C. What you earn on this security would not change as a result of the change in interest rates.

Explanation:

The increase in the interest rate will decrease the price of the T-Bill if you want to sell it to another investor, but what you will earn with the security will not change at all. Your earnings in dollars = interest rate paid by the T-Bill or any other type of bond.

If you buy and sell securities for a living, then a change in the interest rates can make you win or lose money, since the price of the securities will increase or decrease. If interest rates increase, the price decreases. But if you invest on a security to earn the coupon or interest rate that it pays, a change in the price will not affect you because you already own it. The opportunity cost of holding the security might change, but the accounting revenues will not.  

7 0
3 years ago
Omega, Inc. is considering international expansion and wants to know if it is likely to command a high price for its fitness pro
baherus [9]

<u>Answer:</u> Option C

<u>Explanation:</u>

International expansion is a strategy where the organizations enter into global markets for the benefit of making quick profits and business development in new segments. Omega Inc can fix higher prices when their products provide a greater value to the customers in that foreign market.

In the other given situations the company cannot fix a higher price for the fitness products in foreign market. Other situations given are easily available products, low expected sales volume and low price of the competitors.

7 0
3 years ago
Other questions:
  • Analyze Cityscape Hotels Cityscape Hotels has 200 rooms available in a major metropolitan city. The hotel is able to attract bus
    5·1 answer
  • Heidi, the founder of Camp Bow Wow, proves herself to be a leader as she asks her employees for suggestions and inputs before ma
    14·1 answer
  • Jack is preparing for a party and makes potato salad, but he does not realize that the salad contains one escherichia coli bacte
    15·1 answer
  • Which of the following will help sober up of an intoxicated person
    10·1 answer
  • Charismatic leaders are often _____ than transactional leaders.
    13·1 answer
  • You are looking to invest in one of three stocks. All other things being equal, Stock A has high expected earnings growth, stock
    8·1 answer
  • What is the input, conversion and output of opening a summer band camp
    14·1 answer
  • Which of the following is the most common traits of entrepreneurs? A. Passionate B. Risk-taker C. Independence D. Self-assured
    10·1 answer
  • The GDP price index in the United States in 2016 was about 106 ​, and real GDP in 2016 was ​$17.7 trillion​ (2012 dollars). The
    13·1 answer
  • When won’t the CGA apply?
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!