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prisoha [69]
3 years ago
5

Harry Corporation's common stock currently sells for $179.85 per share. Harry paid a dividend of $10.18 yesterday, and dividends

are expected to grow at a constant rate of 6 percent forever. If the required rate of return is 12 percent, what will Harry Corporation's stock sell for one year from now, immediately after it pays its next dividend
Business
1 answer:
bixtya [17]3 years ago
3 0

Answer:

$190.64

Explanation:

In this question, we apply the Gordon model which is shown below:

= Next year dividend ÷ (Required rate of return - growth rate)

where,

Current year dividend

For one year

= $10.18 + $10.18 × 6%

= $10.18 + 0.6108

= $10.7908

For next year

= $10.7908 + $10.7908 × 6%

=  $10.7908 + 0.647448

= 11.438248

The other items rate would remain same

Now put these values to the above formula  

So, the value would equal to

=  11.438248 ÷ (12% - 6%)

= $190.64

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Answer:

The answer is letter D.

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3 years ago
match the name to the letter indicating the functional business area within the enterprise system finance
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3 0
1 year ago
If John made $23,562.55 in wages, and $2,679.32 cents in tips, what amount should he enter for his income when filling out his 1
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Explanation:

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8 0
2 years ago
Read 2 more answers
Frankenstein Enterprises received two notes from customers for sales that Frankenstein made in 2021. The notes included: Note A:
Brums [2.3K]

Answer:

9.17%

Explanation:

Interest on Note B = $227,000 * 8% * 6/12

Interest on Note B = $9,080

Remaining Interest = $16,300 - $9,080  = $7,220

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Annual Interest Rate = 9.16825397

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8 0
3 years ago
Mr. Brown wants to buy a Tesla Model S car, whose price is $100, 848. The dealer offers a loan plan: $30, 000 downpayment, $X at
algol [13]

Answer:

X is $30,000

Explanation:

First, we need to calculate the Amount ofLoan

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This is the situation of annuity payment for 4 years at a 25% interest rate with equal annuity payment each year.

Now we will use the following formula to calculate the value of X

PV of Annuity = Annuity payment x ( 1 - ( 1 + interest rate )^-numbers of years ) / Interest rate

Where

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Interest rate = 25%

Numbers of years = 4 years

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Placing values in the formula

$70,848 = X x ( 1 - ( 1 + 25% )^-4 ) / 25%

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6 0
2 years ago
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