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
Dahasolnce [82]
2 years ago
9

Assume Evco, Inc., has a current price of $50 and will pay a $2 dividend in one year, and its equity cost of capital is 15%. Wha

t price must you expect it to sell for right after paying the dividend in one year in order to justify its current price
Business
1 answer:
gtnhenbr [62]2 years ago
6 0

Answer:

The expected price after 1 year would be$55.5

Explanation:

According to the given data,

Price of the stock (Po) = $50

Dividend after 1year (D1) = $2

Equity cost of capital (KE) =15%

The formula for calculating the price after 1 year i.e.,(P1 ) is

                         

                          Po = (D1 + P1 )/ 1+KE                                      $50= ($2 + P1) / (1+0.15)

                        P1 = [$50(1.15)] - $2 = $55.5

You might be interested in
Suppose the National Bureau of Economic Research (NBER) comes out with a report suggesting that the economy will soon dip into r
sweet [91]

Answer:

(D) The cyclical unemployment

Explanation:

Business activity is subject to the comings and goings of private initiative, so the expansion and recession phases of the economy affect the number of unemployed.

<u>Cyclical unemployment</u> increases considerably during times of recession, due to the deterioration of economic conditions; while decreasing in the stages of expansion, due to the improvement of the economy.

Governments try to reduce the incidence of this type of unemployment by softening the transition between different economic cycles. The objective is that the labor supply does not vary significantly between the stages of expansion and recession so that its demand is not excessively impaired.

3 0
3 years ago
which type of classroom enables students to attend lectures without being physically present with the teacher
il63 [147K]
An online classroom allows you to do it without physically being there
7 0
3 years ago
Read 2 more answers
Suppose you found a CD that pays 4.9% interest compounded monthly for 4 years. If you deposit $10,000 now, how much will you hav
Katyanochek1 [597]

Answer:

=$11,580.00

Explanation:

The CD pays 4.9 percent compounded monthly for four years.

In one year, there will be 12 occasions of compounding; after four years, there would be 12 x 4 = 36 compounds.

The interest rate per year is 4.9 percent; monthly interest will be 4.9 /12, which is 0.4083 percent.

The amount in four years is the same as the future value after four years.

=FV = PV (1+r)n

Pv =$10,000

r=0.4083 %

N =36

Fv = 10,000(1+0.4083/100)36

=10,000(1+0.004083)36

=$10000 x 1.1579932

=$11,579. 932

=$11,580.00

4 0
3 years ago
What is the primary reason to issue stock?
Lapatulllka [165]
To raise money to grow the company
8 0
2 years ago
Read 2 more answers
What is an externality? someone who wouldn't choose to pay for a certain good or service but who'd get the benefits of it anyway
vlabodo [156]

An externality is defined as the cost or benefit that affects a group when the group did not choose to receive that cost or benefit. This results in either a position or negative consequence based on what happened to a third party that was not origionally involved.

Someone who wouldn't choose to pay for a certain good or service but who'd get the benefits of it anyway is the best definition given to be the answer to this question.

3 0
3 years ago
Other questions:
  • A minimum of _____________ african captives were transported to the americas during the trans-atlantic slave trade. 10 million 8
    7·1 answer
  • 1. Which of the following would a person who works in trade labor enjoy doing? Select all that apply.
    10·2 answers
  • "A customer who has signed an arbitration agreement at account opening has a dispute with a representative that he wishes to set
    7·1 answer
  • Max, an employee at HiFi LLC, is responsible for performing the job analysis process in her organization. She is currently plann
    12·1 answer
  • The bank is considering paying interest to customers carrying daily checking account balances in excess of a certain amount. If
    6·1 answer
  • You can probably use the 1040EZ form, as long as what is true?
    7·1 answer
  • Working with which of these systems requires a technician that has been certified in an EPA-approved course?
    9·1 answer
  • A _____ grants the inventor of a new product or process exclusive rights for a defined period to the manufacture, use, or sale o
    12·1 answer
  • Your friend just won the lottery. He has a choice of receiving $50,000 a year for the next 20 years or a lump sum today. The lot
    10·1 answer
  • Kentucky Lumber and MillWork Company contracted to supply Rommell Company millwork for use in the construction of a school build
    12·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!