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vichka [17]
3 years ago
15

the next dividend pwyment by Savitz, inc., will be 1.88 per share. YThe dividends are anticipated to maintain a growth rate of 4

percent forever. If the stock currently sells foe 37 per share, what is the required return?
Business
1 answer:
ollegr [7]3 years ago
6 0

Answer: 9.08%

Explanation:

Using the Gordon Growth model, a required return on a stock can be calculated if the stock price, next dividend and constant growth rate is given.

Stock Price = \frac{Next Dividend}{Required return - growth rate}

37 = \frac{1.88}{r - 0.04}

37(r - 0.04) = 1.88

r - 0.04 = 1.88/37

r = 1.88/37 + 0.04

r = 9.08%

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The Pennsylvania Turnpike is a tolled freeway running through the state of Pennsylvania. Motorists must pay tolls at various poi
slamgirl [31]

Answer: Private good

Explanation:

  According to the given scenario, the Pennsylvania Turnpike is classified the private type of good on the basis of given situation as private good is one of the type of goods that must be purchased by the customers due to its positive advantages or benefits.

The private goods are consumed by the customer in maximum amount in the market as it is one of the essential type of good as it is Rivalry and excludability.  

The following are some example of the private goods are as follows:

  • Food
  • Clothes
  • Fresh air
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 Therefore, Private good is the correct answer.   

 

4 0
4 years ago
If a firm decided to reevaluate and reorganize the way it did business, in hopes of creating competitive advantage, by changing
Vsevolod [243]

Answer:

C. Business process improvement.

Explanation:

Product reevaluation and Life cycle costing are product dependent and aims to improve products on the individual level and the business on the whole.

Business Intelligence is when businesses use different types of data to compile an analysis for informed decision making.

A value chain refers to all the activities that a business undertakes from procurement of raw materials to adding value. This can be a part of improvement process but it is not directly related.

Business process improvement is when management identifies all the business processes and analyses if there is a need for improvement and identifying areas that need change - then improving upon these findings.

This is the right answer.

Hope that helps.

6 0
3 years ago
A company just paid a $2 dividend per share. The dividend growth rate is expected to be constant at 10% for 2 years, after which
Olin [163]

Answer:

Do =  $2.00

D1= Do(1+g)1 =  $2(1+0.1)1 = $2.20

D2= Do(1+g)2 = $2(1+0.1)2 = $2.42

PHASE 1

V1 = D1/1+ke + D2/(1+ke)2  

V1 = 2.20/(1+0.11) + 2.42/(1+0.11)2  

V1 = $1.9820 + $1.9641

V1 = $3.9461

PHASE 2

V2 = DN(1+g)/ (Ke-g )(1+k e)n                                                                                                                                                                                                                                        V2 = $2.42(1+0.03)/(0.11-0.03)(1+0.11)2      

V2 = $2.4926/$0.0649

V2 = $38.4068

The current stock price is calculated as follows:

Po = V1 + V2

Po = $3.9461 + $38.4068

Po = $42.35

Explanation: This question relates to valuation of shares with 2-phase growth model.  The value of shares in the first phase will be determined by discounting the dividend for the 2 years by cost of equity. The dividends for year 1 and year 2 were obtained by subjecting the current dividend paid (Do) to growth rate.  

Moreso, the value of shares for the second phase was calculated by considering the last dividend paid(D2) and then subject it to the new growth rate. The adjusted dividend was then capitalized at the appropriate discount rate of the company.

5 0
3 years ago
Dwayne has renters insurance that he must pay twice a year. If each payment is $84, how much money should he set aside each mont
lozanna [386]

since he has to pay it 2 times a year, it should be divided by 6. so 84/6=14

Answer: C. $14

4 0
3 years ago
Read 2 more answers
When mi ola's purchasing manager places the weekly order for new bikinis based on how many of each type have sold that week, thi
zaharov [31]
I believe, this programmed decision could best be described by: Classical Model.
In the classical model of decision making, we based the decision on something that is the most logical and rational.
This model commonly provide the most objective solution but often fail to see how emotions and relationship between members could influence the decisions.
7 0
3 years ago
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