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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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Keenan Industries has a bond outstanding with 15 years to maturity, an 8.25% nominal coupon, semiannual payments, and a $1,000 p
tester [92]

Answer:

4.40

Explanation:

For the nature of the Yield to Call and Yield to maturity

You can eiher solve with excel, a financial calculation or with approximation method

This will be the formula for approximation method

YTM = \frac{PTM + \frac{C-F}{n }}{\frac{PTM+F}{2}}

PTM= 41.25 (1,000 x 8.25 = 82.5 annual interest divide by 2 as there are semiannual payment)

C= 1045 This is the value of the called bond

F= 1000 The face value of the bond

n= 12 (6 years 2 payment per year)

We plug this into the formula and solve

YTM = \frac{C + \frac{C-P}{n }}{\frac{C+P}{2}}

partiel result of the upper part: 45

partial result, divisor: 1022.5

quotient 4.4009780%

8 0
3 years ago
Red Eye Shipping Inc. has purchased a business intelligence system. The main advantage of such a system is that it eliminates th
Aleksandr-060686 [28]

Answer:

FALSE

Explanation:

A Business Intelligence system generate predictive outcome from the business operations from historical and current data. This data have been gathered from a data warehouse thus, the company still needs to maintain a data warehouse to feed the business intelligence system. As there is a need for a data warehouse, the statement is false.

6 0
3 years ago
A utility company pays an annual dividend of $20 (paid quarterly), a stated or par value of $200, and has a maturity of 10 years
Ray Of Light [21]

Based on the annual dividend on the stock and the market yeild of similar securities, the preferred stock will sell at $227.36.

<h3>How much will the stock sell for?</h3>

This can be found as:

= Dividend x (1 - ( 1 + rate) ^- number of years) / rate

The dividend is quarterly so the rate is:

= 8% / 4

= 2%

Number of periods is:

= 10 x 4

= 40 quarters

Dividend is:

= 20 / 4

= $5

Selling price is:

= 5 x (1 - (1 + 2%)⁻⁴⁰) / 2%

= $227.36

Find out more on preferred stocks at brainly.com/question/18068539.

#SPJ1

8 0
3 years ago
Sarah signed an agreement to rent an apartment from a landlord who also signed the agreement. During the lease negotiations, the
Marta_Voda [28]

Answer:

He is legally expected to provide the space under the overconfidence trap

Explanation:

The landlord was overconfident about his judgment abilities and was quick to make the promise to provide the extra space without thinking of a wider range of possibilities. Thereby exposing himself to a greater risk than he imagined. The parole evidence is an evidence of oral speech. Since he admitted making the promise to Sarah, he is legally expected to provide the space.

8 0
4 years ago
Bill plans to open a self-serve grooming center in a storefront. The grooming equipment will cost $425,000, to be paid immediate
Rudik [331]

Answer:

1.075

Explanation:

The computation of the profitability index is shown below:

= Net Present value ÷ Required investment

where,

Net Present value

= Annual cash inflows × PVIFA for 8 years at 12%

= $92,000 × 4.9676

= $457,019.2 0

Refer to the PVIFA table

And, the required investment is $425,000

So, the profitability index is

= $457,019.2 0 ÷ $425,000

= 1.075

8 0
4 years ago
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