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
Masteriza [31]
3 years ago
5

Item 15Item 15 Gee-Gee's is going to pay an annual dividend of $2.05 a share next year. This year, the company paid a dividend o

f $2 a share. The company adheres to a constant rate of growth dividend policy. What will one share of this common stock be worth six years from now if the applicable discount rate is 11.2 percent
Business
1 answer:
meriva3 years ago
6 0

Answer:

$27.33

Explanation:

For computing the one share of the common stock after six years from now first, we have to determine the price of the common stock which is shown below

Price of the common stock = Next year dividend ÷ (Required rate of return - growth rate)

= $2.05 ÷ (11.2% - 2.50%)

= $23.56

The growth rate is

= ($2.05 - $2) ÷ ($2)

= 2.50%

Now the one share of the common stock after six years is

= $2 × 1.025^7 ÷ (11.2% - 2.50%)

= 2.3773715073  ÷ 8.7%

= $27.33

You might be interested in
Federal express has a(n) ________________ in logistics and customer service, since these are activities it does especially well
andrezito [222]
The answer to this question is that federal express has a core competence. Core competence is the main strenghts or advantages of a business or the company in order for them to become competitive in the market. The concept of Core competency was introduced by Gary Hamel and Prahalad. Core competency is what the business or company can do to their customers and their expertise that is unique that can be valued by the customers.
8 0
2 years ago
What percentage does a bank expect you to put down on a house
myrzilka [38]
Hhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh
5 0
3 years ago
Read 2 more answers
Taylor Shoe Company just realized that the local newspaper advertisement was not correct and they immediately contacted the loca
Artemon [7]

What is the question here?

I don't understand

3 0
3 years ago
A company that has no money to spend on marketing would probably be best advised to try their luck, at least initially, with wha
marysya [2.9K]
C. sales promotion would be the answer
6 0
3 years ago
Which strategy is an example of how companies may upgrade themselves to meet changing customer preferences?
never [62]

The best example of how companies are upgrading themselves to meet changing customer preferences is personified in option (C) making online shopping services available.

Since customers nowadays prefer to shop online more often than not, many companies are now providing online marketplaces in combination with their traditional brick and mortar stores. Some companies do not even have a pop up store – they purely do their transactions online.

8 0
2 years ago
Other questions:
  • A friend and fellow student shares her employment experience over the last 12-week summer break. It took her one full week to fi
    9·1 answer
  • Five years ago, Miller Manufacturing spent $150,000 on a new piece of industrial machinery. Six months ago, the firm spent $32,0
    6·1 answer
  • Indicate whether each of the following audit procedures is a test of controls, a substantive test, or dual-purpose test. Next, i
    6·1 answer
  • which of the following resulted in a retaliation by the united states of increased tariffs on cheeses and meats from europe
    14·2 answers
  • Suppose the government passes a law eliminating holidays and, as a result the production of goods and services increases because
    6·1 answer
  • What is moral hazard? It refers to the actions people take before they enter into a transaction so as to mislead the other party
    9·1 answer
  • Preferred Stock Valuation Farley Inc. has perpetual preferred stock outstanding that sells for $30 a share and pays a dividend o
    6·1 answer
  • Bagrov Corporation had a net decrease in cash of $10,500 for the current year. Net cash used in investing activities was $52,500
    13·1 answer
  • A four-bedroom, four-bath, 4,875-square-foot house was listed at $445,000. Andreas, the seller, accepted an offer that was 95% o
    7·1 answer
  • Which of the following is the process of identifying and documenting the functional and physical characteristics of a work produ
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!