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KiRa [710]
3 years ago
8

Columbus Manufacturing's stock currently sells for $ 23.57 a share. The stock just paid a dividend of $2 a share (i.e.,D0=2). Th

e dividend is expected to grow at a constant rate of 6 % a year. What is the required rate of return on the company's stock? Express your answer in percentage, and round it to two decimal places, i.e., 13.54, for example for 0.1354)
Business
1 answer:
Rina8888 [55]3 years ago
6 0

Answer:

Required rate of return is 14.99%

Explanation:

Given:

Price of stock (Po)= $23.57

Dividend (Do) = $2

Growth rate (g)= 6% or 0.06

Using dividend growth model to calculate required rate of return:

r=\frac{d_{0}\left ( 1+g \right )}{P_{o}}+g

Substituting values in above formula, we get:

r = r=\frac{2\left ( 1.06 \right )}{23.57}+0.06

 = 0.1499 or 14.99%

Therefore, required return of company's stock is 14.99%

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CTSOs (career and technical student organizations) are formed to help develop academic knowledge, technical skills, employability, and leadership skills.

<h3>What are career and technical student organizations?</h3>

This is the term that is used to refer to the vocational organizations that are in existent in the American society that are useful for the students that are in the high school, the university and and other technological career centers.

The goals of the CTSOs is that they would be able to serve the students that are registered in the services so that they are taught certain competencies that they would require as they advance into the careers that they have chosen in the society.

Hence we can say that CTSOs (career and technical student organizations) are formed to help develop academic knowledge, technical skills, employability, and leadership skills.

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8 0
1 year ago
according to one-period model of macroeconomics which of the following statements is correct about an economy engaging in a war
KIM [24]

Option (b) for a response. In order to keep the expenditure multiplier from exceeding 1, output must increase while consumption must decrease.

<h3>Spending multiplier: What does it tell you?</h3>

An economic indicator of the impact that changes in government spending and investment have on a nation's Gross Domestic Product is the expenditure multiplier, often known as the fiscal multiplier.

<h3>When the multiplier is negative, what does that mean?</h3>

The negative multiplier effect happens when a spending leak or initial withdrawal from the circular flow has further impacts and a larger final decline in real GDP.

<h3>Why does multiplier exceed 1?</h3>

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4 0
1 year ago
Phillip deposited $7,775 into a savings account 14 years ago. the account has an interest rate of 4.5% and the balance is curren
Bas_tet [7]
The future amount of an investment with compound interest can be calculated through the equation,

     F = P x (1 + ieff)^n

where F is the future amount, P is the current value of the money, ieff is the effective interest (rate per year), and n is the number of years.

From the equation, all are given except for the effective interest, i. Now, substituting the known values,
  14,398.87 = (7,775) x (1 + ieff)^14

The value of ieff from the equation is 0.044999. 

Since the value of the ieff when translated to percentage is equal to 4.5% as well, the interest rate is compounded yearly. 
3 0
3 years ago
Loran's pretax accounting income in 20X1 is $100,000. Loran had bad debt expense for financial reporting purposes of $14,000 in
stira [4]

Answer:

$2,800

Explanation:

Particulars                                                                       Amount

Favorable temporary difference at the end of 20X2   $7000

* Income tax rate                                                             <u>   40%  </u>

Deferred tax asset account at the end of 20X2         <u>$2,800</u>

6 0
3 years ago
4.
pshichka [43]

the answer to this question is 4.70%

7 0
3 years ago
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