The last day to get exercise the option and receive the dividend is two business days prior to the record date. The customer can also exercise his dividend claim two business days prior to the ex-date or one business date prior to the ex-date. The only option not available to him is one business day prior to the record date.
An option is a right available to a shareholder to buy a particular stock of which he has bought a call option at an agreed price. This option can be exercised by the holder to purchase the share at any given date and at a price that is agreed upon. The option holder requires to be eligible for dividends,
Dividends are declared as a benefit to shareholders of a company. The options holder will have to purchase the shares before the record date and will be eligible to receive a dividend.
1. Learn more about the call option here:
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2. Learn more about dividends here:
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Answer:
Year 1 dividend $2.709
Year 2 dividend $3.413
Year 3 dividend $4.096
Year 4 dividend $4.915
Year 5 dividend $5.898
The present value of the dividends is $ 13.74 as contained in the attached.
Explanation:
The dividend for the 1st year is calculated thus:
DIV1=DIV0*(1+r)
r is the growth rate
DIV1=$2.15*(1+0.26)
DIV1=$2.709
The dividend for the second year is calculated thus:
DIV2=$2.709
*(1+0.26)
DIV2=$3.413
The dividend for year 3 is calculated thus:
DIV3=$3.413*(1+0.2)
DIV3=$4.096
The dividend for year 4 is calculated thus:
DIV4=$4.096*(1+0.2)
DIV4=$4.915
The dividend for year 5 is computed thus:
DIV5=$4.915*(1+0.2)
DIV5=$5.898
Give a little more context please
Answer:
This is the result of law of demand and elasticity of demand
Explanation:
The law of demand states that, other things remaining equal, the higher the price of a commodity, the lower the quantity demand of that commodity. Also, the observed goods in the question is a normal good because all normal goods obey the law of demand.
In addition, the price elasticity of demand is ELASTIC. This means the good is sensitive to price. A 1% increase in price will lead to a significant decrease in quantity demanded.
Also the income elasticity of demand is negative, meaning an increase income means the quantity demanded will decrease. This usually happens for inferior goods.
All these three points can cause it
