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vladimir2022 [97]
2 years ago
9

Corcoran Corp. pays a constant $7.10 dividend on its stock. The company will maintain this dividend for the next 10 years and wi

ll then cease paying dividends forever. If the required return on this stock is 11 percent, what is the current share price
Business
1 answer:
raketka [301]2 years ago
6 0

Answer:

Explanation:

Corcoran Corp. pays a constant $7.10 dividend on its stock. The company will maintain this dividend for the next 10 years and will then cease paying dividends forever. If the required return on this stock is 11 percent, what is the current share price

Given that:

Dividend = $7.10 dividend on its stock

Rate r =  11 percent

The company will maintain this dividend for the next 10 years

\texttt {Current share price}=\texttt {Dividend}\times(\frac{1-(1+r)^{-r}}{r} )

=\$ 7.10\times(\frac{1-(1+0.11)^{-10}}{0.11} )\\\\=\$7.10\times(\frac{1-(1.11)^{-10}}{0.11} )\\\\=\$7.10\times\frac{(1-0.3522)}{0.11}\\\\=\$7.10\times\frac{0.6478}{0.11}\\\\=\$ 7.10 \times5.889\\\\=\$41.81

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You have an investment account that started with ​$3 comma 000 10 years ago and which now has grown to ​$6 comma 000. a. What an
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Answer:

The correct answer for option (a) is 7.17% and for option (b) is $48,546.69.

Explanation:

According to the scenario, the given data are as follows:

(a) Present value = $3,000

Future value = $6,000

Time period = 10 years

So, we can calculate the annual rate of return by using following formula:

Rate of return = (( FV ÷ PV)^1/t  -1)

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Suppose that the market for athletic shoes is initially in equilibrium at point A. Further suppose the demand for athletic shoes
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Answer: Correct. When there is an increase in supply and an increase in demand, the new equilibrium quantity increases but whether the equilibrium price increases or decreases is unknown.

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