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
Nat2105 [25]
3 years ago
9

Each of two stocks, A and B, are expected to pay a dividend of $5 in the upcoming year. The expected growth rate of dividends is

10% for both stocks. You require a rate of return of 11% on stock A and a return of 20% on stock B. The intrinsic value of stock A
Business
1 answer:
Rama09 [41]3 years ago
4 0

Answer:

The intrinsic value of Stock A is 500

Explanation:

According to the DDM method the formula for calculating the intrinsic value of a stock is

Upcoming Dividend/Required rate of return - Growth rate of stock.

Upcoming Dividend of Stock A= 5

Required rate of return on Stock A= 11% or 0.11

Growth rate on stock A= 10% or 0.10

Intrinsic value of stock A=

5/(0.11-0.10)=5/0.01=500

The intrinsic value of Stock A is 500

You might be interested in
Identify which assumption each given scenario references have.
NikAS [45]
Assuming it’s B) Transitive Tastes
5 0
3 years ago
If there is a lack of competition in a market, a market failure results because the quantity of goods sold is ___ than the optim
scoundrel [369]
Goods sold is lower because less competition and then they price it higher because consumers don't have options. 
8 0
4 years ago
In order to build alliance management capabilities in small companies, it is recommended that firms take the ______ approach
julia-pushkina [17]

Answer:

non-equity alliance.

Explanation:

In Business management, a strategy can be defined as a set of guiding principles, actions and decisions that an organization combines so as to achieve its business goals, attract customers and possess a competitive advantage over its rivals in the industry.

Generally, a business strategy sets the overall direction for the business because it focuses on defining how a business would achieve its goals, objectives, and mission; as well as the funds and material resources required to implement or execute the business plan. The components of a business strategy includes the following;

I. Mission.

II. Value.

III. Vision.

Hence, when you wish to build alliance management capabilities in small companies, it is highly recommended that business firms take the non-equity alliance approach.

A non-equity alliance approach can be defined as a contractual relationship between two or more organizations that are interested in achieving common goals and objectives by pooling their resources, capabilities and efforts together while respectively maintaining their organizational independence without creating a new corporation or equity entity.

8 0
3 years ago
Read 2 more answers
Which one of the following is the most widely used source of retirement income?
Luba_88 [7]

Compared to IRAs, Keogh plans, and company pension plans, Social Security<span> is the most widely used source of retirement income. It is based on reports that  88 percent of retirees rely on its steady stream of payments. Fifty-five percent of retirees regards Social Security as their major source of retirement income.  </span>

7 0
4 years ago
Read 2 more answers
Which type of question best fits the purpose of an interview
Elena L [17]
I think the answer would be a background question.

I hope that helped :)
3 1
3 years ago
Read 2 more answers
Other questions:
  • Luxury automobile manufacturers typically add​ quality, services, and other features to differentiate their offers and thus supp
    15·2 answers
  • Gross Accounts Receivable is $10,000. Allowance for Doubtful Accounts has a credit balance of $200. Net sales for the year are $
    11·2 answers
  • Eckman Company purchased equipment for $120,000 on January 1, 2017, and will use the double-declining-balance method of deprecia
    12·1 answer
  • What is required for a patent?
    9·1 answer
  • The population of a country has a relative growth rate of 3% per year. The government is trying to reduce the growth rate to 2%.
    11·1 answer
  • Pagsasagawa NG angkop na kilos NG pamahalaan tungo sa pagtupad NG mga tungkulin sa pamilihan?
    8·1 answer
  • Which of the following survey response methods is the most difficult for researchers to code for evaluation:
    13·1 answer
  • Identifying your sources will help you to establish credibility.
    10·1 answer
  • The Federal Open Market Committee decides that it must increase the money supply by $50. Committee members tell you the reserve
    9·1 answer
  • Nair Corp. enters into a contract with a customer to build an apartment building for $1,000,000. The customer hopes to rent apar
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!