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eduard
3 years ago
12

You are valuing a common stock that just paid a dividend of $1.25 per share. You are expecting the stock to grow at the rate of

4% annually, and the stock to give you a return of 9%. What should be the price of the stock
Business
1 answer:
Agata [3.3K]3 years ago
4 0

Answer:

Price of stock- $26

Explanation:

<em>Using te dividend valuation model, the price of a stock is the present value of the future cash flows expected from the stock discounted at the required rate of return.</em>

Where a stock is expected  to pay dividend growing at a specific rate, the price of the stock can be dertermined as follows:

Price = D(1+g)/(ke-g)

D -dividend payable now,

Ke-required rate of return,

g - growth rate in dividend

So we can work out the price as follows:

Price = 1.25( 1+0.04)/(0.09-0.04)

      = $26

Price =$26

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SME Company has a debt-equity ratio of .60. Return on assets is 7.5 percent, and total equity is $486,000. a. What is the equity
polet [3.4K]

Answer:Equity multiplier=1.6

Explanation:

Debt equity ratio is given as  debt/equity , Therefore

Debt  = Debt equity ratio  X Equity

=0.60 x $486,000

= $291,600

The  Total assets given as Liability(debt+equity)  will now be

=$291,600+$486,000

=$777,600.

Therefore Equity multiplier, Total assets/Total equity

=(777,600/486,000)=1.6

7 0
3 years ago
A pesticide manufacturer has moved its production facility to a foreign country where it is free to dump pollutants into the loc
Lemur [1.5K]

By doing so, the company is contributing to the global tragedy of the commons.

Tragedy of the Commons is an unhappiness resulting from the cruelty of working for something. The tragedy of Shared Ownership arises when every human being tries to take natural resources that are common property for his personal interests to the detriment of other living beings.

The view that causes the Tragedy of Shared Ownership is the desire to gain a lot of profit for personal gain rather than distributing it to other humans and each getting a small share. This view will initially feel beneficial for those who use a lot of natural resources, but in the end the availability of natural resources will run out and actually have a negative impact on those who use them and for other humans. To prevent this, it takes a willingness to sacrifice by getting a little, but it will have a positive impact on the sustainability of the natural resources used.

You can learn more about Tragedy of the Commons here brainly.com/question/9680058

#SPJ4

6 0
11 months ago
What are two main reasons for having a savings account
jasenka [17]

Answer:

two main reasons for having a savings account:

  • It can be used as a vacation fund.
  • An account to pay cash for new things and cover repairs.
  • Can be used as an emergency account.

Hope it helps!

5 0
3 years ago
The following transactions of Sandy Cruz occurred during 2018​: LOADING...​(Click the icon to view the​ transactions.)
FrozenT [24]

Answer:

1.

April 30

No entry​ required

This is because Cruz​'s attorney is certain it is remote that Cruz will lose this lawsuit.

June 30

DR Warranty Expense $14,400

CR Warranty Liability $14,400

Working = 360,000 * 4%

= $14,400

July 28

DR Warranty Liability $6,400

CR Cash $6,400

September 30

DR Lawsuit Loss A/c $150,000

CR Lawsuit Loss Liability $150,000

December 21

DR Warranty Expense $20,000

DR Warranty Liability $20,000

Workings ( Original question says 4%.)

= 4% * 500,000

= $20,000

2. Balance on Estimated Warranty Liability Account

June 30 14,400

July 28 (6,400) -

Dec 21 20,000 +

= $28,000 Credit

3 0
3 years ago
Wally is employed as an executive with Pay More Incorporated. To entice Wally to work for Pay More, the corporation loaned him $
yuradex [85]

Answer:

Wally and Pay More Incorporated

The loan resulted in any income to Wally of $3,960 ($4,320 - $360), which would have been a cost he would have incurred had he borrowed the loan at the prevailing federal interest rate.

On the other hand, it resulted in a lost revenue (expense) of $3,960 ($4,320 - $360) which Pay More Incorporated could have earned if it had loaned it at the prevailing federal interest rate.  This expense is a compensation expense.

Explanation:

Pay More's Loan to Wally = $36,000

Interest rate = 1%

Prevailing interest = $4,320

Interest paid = $360

Difference between prevailing interest and interest paid by Wally = $3,960 ($4,320 - $360).

8 0
3 years ago
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