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
Zanzabum
3 years ago
9

Constant Dividend Growth Valuation Boehm Incorporated is expected to pay a $3.00 per share dividend at the end of this year (i.e

., D1 = $3.00). The dividend is expected to grow at a constant rate of 4% a year. The required rate of return on the stock, rs, is 13%. What is the estimated value per share of Boehm's stock? Do not round intermediate calculations. Round your answer to the nearest cent.
Business
1 answer:
DerKrebs [107]3 years ago
5 0

Answer:

The value of the stock today is $33.33

Explanation:

The constant growth model of the DDM approach will be used to calculate the value of this stock today.

The formula for Value of the stock today using the constant growth model is,

V or P0 = D1 / r - g

The Value of the stock today is,

V or P0 = 3 / (0.13 - 0.04)

V or P0 = $33.33

You might be interested in
A supplier is offering your firm a cash discount of 2 percent if purchases are paid for within ten days; otherwise, the bill is
UNO [17]

Answer: not, I wouldn't reccomend to borrow from a bank at 18% annual

Explanation: You will pay more, as montlhy interest would be 1.5% and for the 60 days you will pay 3% interest for the loan (18/12*2).

Example:

Price $ 100

with 2% of discount by paying within 10 days would be $98

And if you ask for a loan of $98 (that is the amount you need to pay with the discount) in 60 days you must pay to the bank $100.94 (98*1.03)

7 0
3 years ago
Suppose the nominal GDP is $25 million, the price level is 1.25, and the central bank has set the money supply at $10 million. W
lidiya [134]

Answer:

a) real GDP =$20,000,000

b)velocity of money is 2.50

Explanation:

Nominal GDP is normal spending carried out in terms of dollars.

Nominal GDP is the product of real GDP and price level

Nominal GDP= real GDP*Price level

Given the nominal GDP=$25 million and the price level =1.25 then,

$25000000=real GDP *1.25

$25000000/1.25 = real GDP

$20000000= real GDP

Apply the quantity equation in economics which is;

money supply*velocity of money =price level * real GDP

Given the money supply is=$10,000,000 then,

velocity of money = (price level*real GDP)/money supply

velocity of money = (1.25*20,000,000)/10,000,000

velocity of money =2.50

4 0
3 years ago
Read 2 more answers
Lucas Laboratories' last dividend was $1.50. Its current equilibrium stock price is $15.75, and its expected growth rate is a co
Elis [28]

Answer:

Expected dividend yield = 10.0%

Expected capital gains yield =  5.0%

Explanation:

D0 = $1.50 (Given)

E(D1) = D0 * (1 + g) = $1.50 * (1.05) = $1.575

E(P0) = $15.75 (Given)

E(P1) = $15.75 * (1.05)1 = $16.5375

Expected dividend yield = E(D1) / E(P0)

= $1.575 / $15.75 = 0.100 = 10.0%

Expected capital gains yield = (E(P1) - E(P0)) / E(P0)

($16.5375 - $15.75) / $15.75 = 0.050 = 5.0%

4 0
3 years ago
Pete is a woodworker and charges $125 an hour for his time manufacturing custom-made wood products. For his wife's birthday, he
andreev551 [17]

Answer:

GDP is not affected by Pete's production of the jewelry box.

Explanation:

Pete is a woodworker and works 20 hours to prepare a jewelry box to gift his wife. If Pete prepares this jewelry box to sell and earn revenue, this will be considered in GDP but in this case Pete prepares a jewelry box to give his wife as his wife's birthday gift.

All types of gifts received or given in kind are not included in Gross Domestic Production.

6 0
3 years ago
what are five ways you can make sure the customers experience is the best that can possibly turn them into a loyal customer?
DanielleElmas [232]

Answer:

Here is 6 ways

Explanation:

1. Set up ways to communicate with your customers

2. Provide extra perks for your most loyal customers

3. Consider different payment plans

4. Provide great customer service

5. Don’t rely too much on technology

6. Offer a head start

8 0
2 years ago
Other questions:
  • 1. Which of the following statements defines "grace period:" 1. The grace period is the day your payment is due. 2. The grace pe
    10·1 answer
  • A wholly owned subsidiary is appropriate when the firm wants Multiple Choice 100 percent of the profits generated in a foreign m
    8·1 answer
  • Causes of child labor
    6·2 answers
  • if you deposit a check into your account and the teller tells you it is on hold for five days, can you still spend that money to
    12·2 answers
  • An insurance company is
    15·1 answer
  • As an advertising manager of a company, you have been asked to write a proposal stating why the company should advertise and it'
    15·1 answer
  • Home Day is a large supermarket. It recently launched its own brand of cereals called Fast Bites, equivalent to most national br
    11·1 answer
  • Zeke shares the company’s organizational chart with employees during an all-staff meeting
    11·1 answer
  • Two differences between purchasing shares on the stock market and saving in a commercial bank
    6·1 answer
  • ______ economics considers the desirability of certain aspects of the economy and underlies expressions of support for particula
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!