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miss Akunina [59]
3 years ago
10

Firm b pays a constant $9.50 dividend on its stock and will maintain this dividend for the next 11 years and will then cease pay

ing dividends forever. if the required return on this stock is 11 percent, what is the current share price? (do not round intermediate calculations and round your answer to 2 decimal places,
e.g., 32.16.)
Business
1 answer:
sdas [7]3 years ago
6 0

Firm b pays a constant dividend (D0) = $9.50

Number of years (N) = 11 years

Rate of return on the stock ( R ) = 11%

The share price of the stock (P0) = Present value of dividend for 11 years at 11%

P0 = D0*PVIFA (k%,n)

P0 = $9.50*PVIFA(11%,11)

P0 = $9.50*6.20625

P0 = $58.96

Hence, the price of the stock is $58.96

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Your grandfather made an investment of $4,000 the day you were born, as such starting to earn returns immediately. His assumptio
weeeeeb [17]

Answer:

Acumulated value=57,775.84

Explanation:

this problem can be solved applying the concept of annuity, keep in mind that an annuity is a formula which allows you to calculate the future value of future payments affected by an interest rate.by definition the future value of an annuity is given by:

s_{n} =P*\frac{(1+i)^{n}-1 }{i}

where s_{n} is the future value of the annuity, i is the interest rate for every period payment, n is the number of payments, and P is the regular amount paid

But there is an special thing to keep in mind and is the initial payment so we must to calculate the 4,000 in the future so we have:

Acumulated value=s_{n} +P*(1+i)^{n}

Acumulated value=1,500*s_{18} +4,000*(1+0.06)^{18}

Acumulated value=57,775.84

3 0
3 years ago
3. Hari Seldon is planning for his retirement 6 years from now. He plans to deposit $30000 each year for 6 six years (i.e., 6 de
erik [133]

Answer:

a) $231,468.30

b) $209,259.56

c) 9.59%

Explanation:

a) to calculate FV, n=6,I=10, pv=0 and pmt=30000

b) to calculate effect of inflation On FV

N=6, I =6 (nominal interest less inflation), pv=0 and pmt=30000

c) [(231468.30-209259.56)/231468.30]x100

5 0
3 years ago
7. Two farmers, A and B, each apply 100 tons of manure on their fields. To reduce manure runoff, the government has decided to r
valentinak56 [21]

Answer:

Explanation:

1) The total cost of reducing runoff if the farmers are not allowed to trade permits is:

total loss = farmer A' loss + farmer B's loss

where:

  • farmer A's loss = (100 - 50) x $25 = $1,250
  • farmer B's loss = (100 - 50) x $50 = $2,500

total loss = $1,250 + $2,500 = $3,750

2) The total cost of reducing runoff if the farmers are allowed to trade permits is:

Since farmer A will be willing to sell his permits to farmer B for a price that is ≥ $25 and ≤ $50, the total cost of reducing runoff is $2,500.

If farmer A sells his runoff permit at a price higher than $25 his costs will decrease but farmer B's costs will increase, so any gain due to price change is offset by the other farmer's loss.  

8 0
3 years ago
If the core part of the purchase is ___________. bad it does not affect satisfaction. good it increases satisfaction. good it de
Andre45 [30]

If the core part of the purchase is bad it increases dissatisfaction

Explanation:

A core product is a product or service of a company more closely related to its core competences. The central product allows the functionality, benefit or remedy to issues with which the customer orders the commodity.

For example, the core component of a car's ability to drive places at an easy speed is the core advantage.

When you can not give quality service to your clients, you would be disappointed and depressed, even though you can deliver them an outstanding key product.

4 0
3 years ago
Behavioral finance is the study of:_________.
juin [17]

Answer:

D). how investors react to the amount of risk versus the amount of return in securities.

Explanation:

Behavioral finance can be regarded as study involving influence of psychology on investors behavior as well as financial analysts. encompass effects that comes after this on the markets. It explains that investors cannot always described as rational. It should be noted that the Behavioral finance is the study of how investors react to the amount of risk versus the amount of return in securities.

7 0
3 years ago
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