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12345 [234]
3 years ago
13

Carter's preferred stock pays a dividend of $1.00 per quarter. If the price of the stock is $45.00, what is its nominal (not eff

ective) annual rate of return?
Business
1 answer:
Lera25 [3.4K]3 years ago
3 0

Answer:

8.89%

Explanation:

The answer is 8.89%

Here is how we arrived at this.

Dividend = 1$ times 4

= $4 annually

Then we calculate for the nominal rate of return.

This is equal to dividend / price.

= $4/ $45

= 0.0889

To convert this to percentage

0.089 x 100

= 8.89% is the nominal annual rate of return.

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Best Mobile and Turbo Tech Inc. are two competitors in the mobile phone market. The cost incurred by each company to manufacture
crimeas [40]

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Turbo Tech has been able to offer more perceived value than Best Mobile

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Turbo Tech has managed to market itself as a superior brand compared to Best Mobile. Through aggressive marketing, Turbo has convinced the industry that it is better than Best mobile.

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7 0
3 years ago
Schnusenberg Corporation just paid a dividend of D 0 = $0.75 per share, and that dividend is expected to grow at a constant rate
natta225 [31]

Answer:

Current stock price will be $14.50

So option (a) will be correct answer

Explanation:

We have given dividend paid D_0=$0.75\ per\ share

Growth rate g = 6.5 %

Required return on market = 10.50 %

Risk free return = 4.50 %

\beta =1.25

So next dividend D_1=0.75\times (1+0.065)=$0.798

We have to find thcompany current stock price P_0

Required rate of return is given by

Required rate of return =  Risk Free Return + \beta (market\ return-risk\ free\ return)

= 4.5+1.25×(10.5-4.5) = 12 %

Now current stock price P_0=\frac{D_1}{R_e-g}=\frac{0.798}{0.12-0.065}=$14.50

So option (a) will be correct option

3 0
4 years ago
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