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
S_A_V [24]
4 years ago
13

Storico Co. just paid a dividend of $2.00 per share. The company will increase its dividend by 20 percent next year and will the

n reduce its dividend growth rate by 5 percentage points per year until it reaches the industry average of 5 percent dividend growth, after which the company will keep a constant growth rate forever. If the required return on the company's stock is 17 percent, what will a share of stock sell for today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Business
1 answer:
just olya [345]4 years ago
5 0

Answer:

P0 = $22.54949 rounded off to $22.55

Explanation:

The dividend discount model or DDM will be used to calculate the price of the stock today. The DDM values a stock based on the present value of the expected future dividends from the stock. The formula for price today for a stock whose dividend grows at various rates before becoming constant is,

P0 = D1 / (1+r)  +  D2 / (1+r)^2  +  ...  +  Dn / (1+r)^n  +  [(Dn * (1+g) / (r - g)) / (1+r)^n]

Where,

  • g is the constant growth rate

P0 = 2 * (1+0.2) / (1+0.17)  +  2 * (1+0.2) * (1+0.15) / (1+0.17)^2  +  

2 * (1+0.2) * (1+0.15) * (1+0.1) / (1+0.17)^3  +  

[(2 * (1+0.2) * (1+0.15) * (1+0.1) * (1+0.05) / (0.17 - 0.05)) / (1+0.17)^3]

P0 = $22.54949 rounded off to $22.55

You might be interested in
This chart represents different workplaces. Circles A, B, and C are particular to certain career pathways and D represents a typ
Zolol [24]

Answer:

its A

Explanation:

7 0
3 years ago
Read 2 more answers
In June, one of the processing departments at Furbush Corporation had ending work in process inventory of $12,000. During the mo
andre [41]
Search up A gardener can increase the number of dahlia plants in an annual garden by either buying new bulbs each year or dividing the existing bulbs to create new plants . The table below shows the expected number of bulbs for each method

Part A
For each method,a function to model the expected number of plants for each year

Part B
Use the Functions to Find the expected number of plants in 10 years for each method.

Part C
How does the of plants in five years compare to the expected number of plants in 15 years !Explain how these patterns could affect the method the gardener decides to use.
7 0
3 years ago
In the purchasing decision process, the ________ are those who have the power to prevent sellers or information from reaching me
VikaD [51]

Answer: The gate keeper

Explanation: The gate keeper in purchase decision making, is the individual who works directly for the decision maker. The gate keeper gives key advice to the decision maker when making purchase, to either make a deal or not.

The gatekeeper has the ability of stopping information about a product from getting to the key decision maker in purchase.

5 0
3 years ago
MacKenzie Manufacturing purchased equipment for $160,000. In addition, shipping charges of $2,000 were incurred to obtain the eq
postnew [5]

Answer:

The amount of depreciation expense each year is (D) $31,900

Explanation:

Total cost of the equipment = Purchased cost + Shipping charges + foundation and install fee = $160,000 + $2,000 + $12,500 = $174,500

MacKenzie Manufacturing use the straight-line method, Depreciation Expense each year is calculated by following formula:  

Annual Depreciation Expense = (Cost of the equipment − Residual Value )/Useful Life = ($174,500 - $15,000)/5 = $159,500/5 = $31,900

5 0
3 years ago
McHenry, a New York resident, files a suit in a New York state court against OneWorld Inc., a company based in California. OneWo
anygoal [31]

Answer:

b. the degree of interactivity via the app between McHenry and OneWorld

Explanation:

Zippo sliding scale is used to assess the problem of deliberate availability when the contacts of the defendant are based on Internet behaviour.one of the things it measures is the degree of contact.q

3 0
3 years ago
Other questions:
  • Nicholas earned 11.5% in his savings account. If he is in the 27% tax bracket, what is his after-tax savings rate of return?
    12·1 answer
  • What type of mining is used for both coltan and gold?
    12·1 answer
  • True or false: allocative efficiency is achieved by equalizing consumer surplus and producer surplus
    9·1 answer
  • Structural changes brought on by industrialization in the united states meant that families changed from "grapevine" forms to:
    5·1 answer
  • Which of the following events could decrease the cost of money? Check all that apply.
    10·1 answer
  • One natural consequence of mastering your job can be increased
    12·1 answer
  • Problems and Applications Q11 You are the curator of a museum. The museum is running short of funds, so you decide to increase r
    6·1 answer
  • If tremaine waited until he had $30,000 saved for a down payment, what would his monthly payment be
    10·1 answer
  • Which of the following needs to be done before depositing a check using a mobile app?
    14·1 answer
  • Most operating decisions of management focus on a narrow range of activity called the ______ of production.
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!