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
Veseljchak [2.6K]
3 years ago
7

A stock is expected to pay $0.70 per share every year indefinitely. If the current price of the stock is $18.90, and the equity

cost of capital for the company that released the shares is 7.9%, what price would an investor be expected to pay per share five years into the future
Business
1 answer:
PolarNik [594]3 years ago
5 0

Answer:

$32.72

Explanation:

In this question, we are asked to calculate the price an investor would be expected to pay per share in the next five years.

We proceed as follows to calculate this.

Dividend = $0.70

Share price = $18.90

Hence = Dividend / Share price

= 0.70 / 18.90

= 0.037037

Cost of Equity = 7.9%

Expected growth = 0.037037 + 0.079

= 0.116037

Add one to it = 1 + 0.116037

= 1.116037

Share price after 5 year = $18.90 * (1.116037)^5 = $32.7231

You might be interested in
Microsoft project is the most widely used project management software today and is an example of a ________ tool.
fomenos
Software documents tools
6 0
3 years ago
If sales volume increases and all other factors remain constant, then the:______.
Montano1993 [528]

If sales volume increases and all other factors remain constant, then the Margin of safety will increase

Explanation:

The margin for safety (MOS) is described as an overall excess of current or expected revenue, expressed either in terms of currency or in units, or as a percentage of total revenues.

One of the main ways to increase the safety margin is through increasing the gross value per unit (if business conditions are favourable) and by reducing the variable cost per unit of the good. This can be accomplished by rising selling costs.

6 0
3 years ago
To increase the popularity of its new range of smartphones, gizmopro inc., a mobile phone manufacturer, offered several accessor
ikadub [295]

Answer: This question lacks the following answers:

a. market share pricing

b. profit maximization

c. demand orientation

d. sales maximization

<u>The correct answer is b)</u>

Explanation:

The practice of giving away free things (mobile accessories) can be good after the launch of a new product range, or even when the company itself is entirely new. However, it is not feasible in the long run, as the company <u>does not generate profit</u> from giving products for free.

Giving discounts is definitely more lucrative, as the discount itself provides enough of an incentive for the customer to buy the accessory. On the company side, <em>profit </em>will be generated (although decreased with the discount, but still generated compared to giving free things).

6 0
4 years ago
Uplift, weathering, burial, and heating/melting can transform one rock type into another. B. All rocks in the Earth's crust will
melomori [17]

Answer:

b. All rocks in the Earth's crust will, at some point, be subducted and melted to create igneous rock.

Explanation:

There are 3 types of rock:

1. Igneous, wich are formed when 2 tectonic plates collide and magma goes to surface getting cold

2. Sedimentary: when many layers of  preexistent rocks produce pressure and heat by weigth  melting the rocks.

3. Metamorphic: a new rock is formed by chemical and/or physical reaction over preexistent rocks

Sedimentary and metamorphic  would be subducted in order to produce new igneus rocks.

8 0
3 years ago
When incorporating, a business
DedPeter [7]

Answer:

May incorporate in any state it chooses.

Explanation:

Incorporation can be defined as the creation of a new business which will have equal rights as that of an individual.

The different steps for incorporation include:

- Proper documentation of the reports of incorporation.

- Choosing a suitable name for the business.

- Documenting the various operational agreements.

- Appointing managers to supervise the daily activities.

- Getting a federal employment identification number.

- Opening accounts for keeping the revenues that will be generated by the company.

- Employing diffetents workers to carry out various activities in the company.

5 0
3 years ago
Other questions:
  • Polly tried for a half an hour to get online. Her tablet could detect a signal, which means that her wireless card was turned on
    5·2 answers
  • Which form of marketing communication involves engaging directly with carefully targeted individual consumers and customer commu
    10·1 answer
  • Leah and santana have been requested to print a daily report of scheduled activities. their supervisor needs to know if each par
    13·1 answer
  • Consider luxury weekend hotel packages in las vegas. When the price is $250, the quantity demanded is 2,000 packages per week. W
    7·1 answer
  • Assume again that the cost of capital is 7 percent and the effective tax rate is 40 percent. How would the payback, internal rat
    15·1 answer
  • Suppose you have $10,000 in cash and you decide to borrow another $10,000 at a(n)6% interest rate to invest in the stock market.
    5·1 answer
  • Oak Corp., a calendar-year corporation, was formed three years ago by its sole shareholder, Glover, and has always operated as a
    6·1 answer
  • Which of these career positions typically advise customers of the amount of money they need to support their families in case of
    15·2 answers
  • In an attempt to improve customer service, Alpha Toys Inc. decided to assign a team to investigate the kinds of services offered
    10·1 answer
  • Eduardo is currently involved in FBLA (Future Business Leaders of America). He has dreams to work on Wall Street. Assuming he wi
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!