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
guajiro [1.7K]
3 years ago
12

The Isberg Company just paid a dividend of $0.75 per share, and that dividend is expected to grow at a constant rate of 5.50% pe

r year in the future. The company's beta is 1.15, the market risk premium is 5.00%, and the risk-free rate is 4.00%. What is the company's current stock price, P0? $18.62 $19.08 $19.56 $20.05 $20.55
Business
1 answer:
hoa [83]3 years ago
6 0

Answer:

The company's current stock price is $ 18.62.

Explanation:

To calculate the company's current stock price we have to use first the following formula to calculate the: Expected Return of stock

Expected Return of stock = Risk Free Rate+ Beta * Market Risk Premium  

Expected Return of stock= 4+1.15*5      

=4+5.75      

Expected Return = 9.75%      

Then, we can calculate the stock price with the following formula:

Price = Dividendat year 1/ Return- Growth    

D1 =0.75*105.5%    

=0.79125      

Price =0.79/( 0.0975-0.055)      

=18.62      

The price is $ 18.62

You might be interested in
A limited liability company is best thought of as a cross between a partnership and a:
8_murik_8 [283]

An LLC is a cross between a partnership and a corporation, because you have the flexibility of a partnership but more of the legal and financial protections that a corporation has.

7 0
3 years ago
In a guaranty​ situation, the​ _____ contract is between the person who agrees to pay the debt if the primary debtor does not an
Natali5045456 [20]
<span>In a guaranty​ situation, the​ guaranty contract is between the person who agrees to pay the debt if the primary debtor does not and the original creditor.

The guaranty contract outlines the role of the </span>people in the agreement. It shows the lender to borrow agreement and obligation. This agreement serves as a document to make sure the lender has proof in value to get something in return from lending the money. 
8 0
3 years ago
Mary is introduced to three new people at a party. Later, however, she cannot remember the names of any of her new acquaintances
MissTica

Answer:

She never encoded the names into long-term memory is the correct answer.

Explanation:

7 0
3 years ago
Which will you likely have to provide on college applications?
77julia77 [94]
Personal information :)
7 0
3 years ago
ROM Corporation had kept all its hiring plans on hold during the last four quarters because the economy was in a state of recess
Vanyuwa [196]

Answer:

D. Computer manufacturers have aggressively started hiring more staff

Explanation:

8 0
3 years ago
Other questions:
  • What is the primary goal of a society ?
    10·1 answer
  • Friendly Inc., through no fault of its own, lost an entire plant due to an earthquake on May 1, 2016. In preparing its insurance
    13·1 answer
  • Please help will give brainliest
    9·2 answers
  • At January​ 1, 2019, the Accrued Warranty Payable is $ 1 comma 100. During​ 2019, the company recorded Warranty Expense of $ 19
    11·1 answer
  • Calculating and using Dual Charging Rates
    13·1 answer
  • Diversification is important in investing because...
    5·2 answers
  • For a perfectly competitive firm that does not shut down, the supply curve is a. the portion of the marginal cost curve at or ab
    10·2 answers
  • Which of the following is a good time management technique
    5·2 answers
  • 6 years ago paid 490,000 using 40 year straight line depreciation, what is the value
    11·1 answer
  • Cereal is an example of a consumer product, where many ________ cost comprehensive prototypes are built since the product has __
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!