Answer:
$85.71
Explanation:
To calculate the price to pay for the stock of Hudson Corporation, we use the dividend discount model formula stated as follows:
P = Next year dividend ÷ (r - g) ................................ (1)
Where,
P = stock price today = ?
Next year dividend = $3.00
r = required return = 7.10% % = 0.071
g = dividend growth rate = 3.60% = 0.036
These above values are now substituted into equation (1) as follows:
P = 3 ÷ (0.071 - 0.036) = 3 ÷ 0.035 = $85.71
Therefore, I will pay $85.71 for Hudson Corporation's stock today.
Contribution Margin Per Unit (a) = $9.60 per unit
Increase in Unit Sales (b) = 1 unit
Increase in Net Operating Income
(a) X (b) = $9.60 X 1 = $9.60
There will be a $9.60 increase in Net Operating Income if sales increase in 1 ,001 units.
Answer:
B) Unlike with capital structure, taxes are not an important market imperfection that influence a firm's decision to pay dividends or repurchase shares.
Explanation:
Taxes are a very important market imperfection that specially affect dividends' policies.
Any tax affects the market negatively, but corporate shareholders are affected twice since the corporation's profits are taxed and the dividend's received by the shareholders are also taxed, as well as any capital gain.
Answer:
The answer is letter D
Explanation:
All of the following tend to occur except firms offering fewer services than people wish to purchase.