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IgorLugansk [536]
3 years ago
7

Graphical Designs is offering 20-20 preferred stock. The stock will pay an annual dividend of $20 with the first dividend paymen

t occurring 20 years from today. The required return on this stock is 5.10 percent. What is the price of the stock today?
Business
1 answer:
Anastaziya [24]3 years ago
7 0

Answer:

$ 152.35  

Explanation:

The stock price today can be computed by first determining the future value of the dividend in perpetuity ,then discounting that to present value.

Value in perpetuity=dividend/required return

dividend is $20

required return is 5.10%

value in perpetuity=$20/5.10%=$392.16

The price of the stock today is the present value of the value in perpetuity

PV=FV*(1+r)^-n

FV is $392.16

r is the required return of 5.10%

n is the number of years involved,which is 19,it is 19 because counting from today till the next next years would be first day of the next twenty years

price=$392*(1+5.10%)^-19=$ 152.35  

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Suppose investors can earn a return of 2% per 6 months on a Treasury note with 6 months remaining until maturity. The face value
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Answer:

Price of treasury bill = $9,803.92

Explanation:

<em>The price of the treasury note would be the present value of the future receivable on maturity discounted at the rate of return of 2% per six-month.</em>

The formula is FV = PV × (1+r)^(n)

PV = Present Value- ?

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n- number of years- 1/2

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PV = 9,803.92

Price of treasury bill = $9,803.92

5 0
3 years ago
According to your text, in the broadest terms, the "marketplace" refers to:_________
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Answer:

A. The World of trade

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8 0
4 years ago
Bottle Top, Inc. recently announced they will pay their first annual dividend next year in the amount of $0.75 a share. The divi
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Answer:

$12.50

Explanation:

Data provided in the question

Annual dividend next year = $0.75

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Hence we considered all the information which is given in the question

4 0
4 years ago
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Specializes in bringing buyers and sellers together.

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A broker can be defined as an individual or a firm that acts as a middleman between the buyers and the sellers. A broker is a licensed agent that is permitted to purchase or sell stocks and other investments.

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As a manager for your company some of your responsibilities include measuring metrics and overseeing company strategies. You obs
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Answer:

The primary reason for the large increase in productivity would be the management factor.

Explanation

An important factor that affects the productivity in a company is the management that can have a great influence as good managers that are competent, make a good use of the resources, implement good strategies and develop good relationships with employees generating a good working environment help increase the productivity. According to the question, this is the main reason that can be inferred.

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