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
alexandr1967 [171]
3 years ago
13

Maxwell Communications paid a dividend of $1.35 last year. Over the next 12 months, the dividend is expected to grow at 11 perce

nt, which is the constant growth rate for the firm (g). The new dividend after 12 months will represent D1. The required rate of return (Ke) is 24 percent. Compute the price of the stock (P0). (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Business
1 answer:
PilotLPTM [1.2K]3 years ago
4 0

Answer:

Current dividend paid (Do) = $1.35

Growth rate (g) = 11% = 0.11

Cost of equity (ke) = 24% = 0.24

Po = Do<u>(1 + g)</u>    

           Ke - g

Po = $1.35<u>(1 + 0.11)</u>

                 0.24 - 0.11

Po = <u>$1.4985</u>

            0.13

Po = $11.53                                                                                                                                                                                                                

Explanation:

The current market price of the stock is a function of current dividend paid, subject to growth rate, divided by the current market price of the stock.

You might be interested in
Parsons Company is planning to produce 2,900 units of product in 2020. Each unit requires 2.00 pounds of materials at $7.00 per
olga55 [171]

Answer:

Results are below.

Explanation:

<u>First, we need to calculate the total cost of producing 2,900 units:</u>

Total cost= direct material + direct labor + allocated overhead

Total cost= (2*7)*2,900 + (0.5*16)*2,900 + [(0.5*16)*0.6]*2,900

Total cost= 40,600 + 23,200 + 13,920

Total cost= $77,720

<u>Now, the unitary standard cost:</u>

Unitary cost= total cost/number of units

Unitary cost= 77,720 / 2,900

Unitary cost= $26.8

3 0
2 years ago
Which of the following expresses the value of a levered firm (VL) in the Static Tradeoff model of optimal capital structure [Not
Brut [27]

Answer:

C. VL = VU + PV(Tax Shield) - PV(CFD)

Explanation:

The static trade off theory is a theory of capital structure in corporate finance, first proposed by Alan Kraus and Robert H. Litzenberger. The theory emphasizes the trade-offs between the tax benefits of increasing leverage and the cost of bankruptcy associated with higher leverage. The <u>answer is C</u> as we know relative to the unleveraged firm, leverage provides both costs and benefits. The benefits are the tax shields provided by debt.

7 0
3 years ago
A product's purchase cost plus the discounted cost of maintenance and repair less the discounted salvage value gives the _______
CaHeK987 [17]
<span>I believe the answer for you question would be life-cycle</span>
4 0
3 years ago
A savings deposit is a type of Group of answer choices time deposit that earns interest and allows the depositor to write checks
Korvikt [17]

Answer:

The answer is that the saving deposit is the account of interest earning at a bank or institution in which funds can be drawn out or withdrawn at anytime without a penalty payment.

Explanation:

Saving deposit is a kind of bank deposit where mostly an individual or person or a non- profit organization drawing or withdrawing regular interest and it is payable on the notice of 30 days.

Therefore, it is a kind of account where interest earning at the bank or at institution and allows withdraw of funds at anytime without penalty.

3 0
2 years ago
Covered entities must report all phi breaches to the _______ annually
andrezito [222]
<span>Covered entities must report all phi breaches to the Federal Register annually. The Federal Register is the daily newspaper of the Federal government. It is a legal a legal newspaper published every business day by the National Archives and Records Administration (NARA).</span>
3 0
3 years ago
Other questions:
  • Which is not an effective principle for preparing main points? A. Balance the amount of time given to each main point B. Make su
    6·2 answers
  • In monopolistic competition, what effect do price variations generally have on the market as a whole
    5·1 answer
  • Norwegian resort tours (nrt), which operates in a very competitive marketplace, is considering four categories of performance me
    8·1 answer
  • What law gives you the legal right to know about all the hazardous chemicals that you may be exposed to at work, the specific ha
    13·1 answer
  • A strategic vision for a company__________
    12·1 answer
  • Arturo hires Kate to work in new sporting goods store. "Look," he explains, "I can only pay you $9.00 per hour. But if business
    8·1 answer
  • Blackmon Brothers law firm used 165 legal pads over the last three weeks (15 days). It takes them three days to get more, and th
    8·1 answer
  • Identify whether a debit or credit results in the indicated change for each of the following accounts.
    7·1 answer
  • When does the price of an item increase?
    11·2 answers
  • Give the human resource and it law​
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!