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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

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An organization that is global within two years of its inception with a major focus on foreign markets rather than its domestic
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Answer: born global

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An organization that is global within two years of its inception with a major focus on foreign markets rather than its domestic market can be said to be born global.

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One disadvantage of the corporate form of business ownership is the:
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Answer:

The correct answer is letter "D": double taxation of distributed profits.

Explanation:

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3 years ago
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3 years ago
Weighted Average Method, Unit Cost, Valuing Inventories Applegate Enterprises produces premier raspberry jam. Output is measured
iris [78.8K]

Answer:

1. 780,000 pints

2. $1

3. $780,000

Explanation:

1. The computation of the equivalent units of production is shown below:

= Units completed and transferred out + completed units in ending inventory  × completion percentage

= 700,000 pints + 200,000 pints × 40%

= 780,000 pints

2. The computation of the unit cost for January month is shown below:

= (Beginning Work in process + Costs added during January) ÷  equivalent units

= ($156,000 + $624,000) ÷ (780,000 pints)

= $1

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= Units completed and transferred out × unit cost + completed units in ending inventory  × completion percentage × unit cost

= 700,000 pints  × $1 + 200,000 pints × 40% ×$1

= $780,000

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3 years ago
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