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
Ne4ueva [31]
2 years ago
10

Praetorian Industries will pay a dividend of $2.50 per share this year and has an equity cost ofcapital of 8%. Praetorianʹs stoc

k is currently trading at $84 per share. By comparing Praetorianwith similar firms, an investor expects that its dividends will grow by up to 5% per year. Whatis the best next step that the investor should take regarding Praetorianʹs stock?A) Sell any Praetorian stock that she owns.B) Short Praetorianʹs stock.C) Revise Praetorianʹs equity cost of capital.D) Revise her estimate of Praetorianʹs dividend growth
Business
1 answer:
Alenkinab [10]2 years ago
6 0

Answer:

The best next step that the investor should take regarding Praetorianʹs stock is C. Revise her estimate of Praetorian's Dividend Growth

Explanation:

Consider the following calculations

Price = D (1+g)/ (r-g) = 2.5*(1.05)/(0.08-0.05) = $ 87.5

Hence, the stock is underpriced at $ 84 per share .

You might be interested in
3 uses of money supply
zalisa [80]

Answer:

Money serves as a medium of exchange, as a store of value, and as a unit of account.

7 0
3 years ago
Matrix Corporation's balance sheet and income statement appear below: Comparative Balance Sheet Ending Balance Beginning Balance
Bad White [126]

Answer:

Check the explanation

Explanation:

Cash flow from operating activities:  

Net income                                                                     $116

Adjustment to reconcile net income to cash basis:  

Depreciation expense ($359+1-347)                              $13

Gain on sale of equipment                                              (14)

Decrease in account receivable (40-39)                         $1

Decrease in inventory (44-43)                                          $1

Increase in account payable (30-26)                               $4

Decrease in accrued liabilities (18-15)                              (3)

Decrease in income tax payable (40-39)                         (1)

Net cash flow from operating activities                           $117

5 0
3 years ago
Help Please NO FAKE ANSWERS PLEASE I REALLY NEED HELP (economics)
soldier1979 [14.2K]
If your a busy small business owner, taking time away from your store makes you less efficient. The trade offs for using this premium service are 1. your spending more money 2. control over quality. Vise versa if your paying more for the “best groceries” then that may not be an issue. Also be aware that another issue is stocking, going to the store yourself does not guarantee that the store will have all items in stock when you go. 3. Time, taking time to grocery shop takes away from your business or the cost of an employee to watch the business or do the shopping for you having you rely on a third party’s judgment. 4. Gas, the cost of gasoline to go to and from the store. If all these are added up then you are essentially paying more for your “in person” groceries as it is. Choosing to grocery shop yourself saves you money (although how much? Once everything is taken into account?) but again the time it takes away is significant. For a busy small business owner time is extremely important and this is why the trade off of cost or added expenses for groceries may be worth it. (I hope this helps guide you in answering this question).
3 0
2 years ago
How did theodore roosevelt distinguish a "good" trust from a "bad" trust? a "good" trust was efficient, and had to be held to st
lisabon 2012 [21]

<span>According to Roosevelt, good trust stayed within reasonable bound whereas, "bad" trust hurt societies general welfare. Roosevelt insisted that it was essential to make the distinction between the two because he had a strong preference to regulate corporations for the public welfare rather than destroy them.</span>

8 0
3 years ago
Read 2 more answers
The Treaty of Paris gave __________ to the United States.
faltersainse [42]
It is A. i think...........
8 0
3 years ago
Read 2 more answers
Other questions:
  • The idea that the demand for autoworkers stems from the demand for automobiles is
    14·1 answer
  • Hannigan Lumber employs 155 workers. One of the firm's former employees used the Civil Rights Act of 1991 to file and win a disc
    10·1 answer
  • The higher the _____ that future earnings may not be achieved, the higher the return on investment investors demand.
    15·1 answer
  • Consider the following transactions for Thomas Company and their effect on the accounting equation. Click on each transaction fo
    11·1 answer
  • The account​ "Accounts Receivable" began with a zero balance and then had the following​ changes: increase of​ $625, decrease of
    9·1 answer
  • The following information is available for Marin Inc. for three recent fiscal years. 2022 2021 2020 Inventory $565,000 $572,000
    11·1 answer
  • How much should you pay for a share of stock that offers a constant growth rate of 13%, requires a 18% rate of return, and is ex
    12·1 answer
  • The expected value of each course of action in a decision tree is determined by starting at the beginning of the tree (the left-
    10·1 answer
  • The present value of the following cash flow stream is $8,250 when discounted at 8.7 percent annually. What is the value of the
    15·1 answer
  • Suppose real GDP is forecasted to grow by 2.78 %, the velocity of money has been stable, and the Fed announces an inflation targ
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!