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sasho [114]
3 years ago
14

stock has a required rate of return of 10.25%, and it sells for $57.50 per share. The dividend is expected to grow at a constant

rate of 6.00% per year. What is the expected year-end dividend, D1? a. $2.20 b. $2.69 c. $2.96 d. $2.44 e. $3.25
Business
2 answers:
elena-s [515]3 years ago
7 0

Answer:

D; $2.44

Explanation:

In this question, we are asked to calculate expected year-end dividend D1 for a particular stock.

Mathematically,

Current stock price = Expected year end dividend/(Required return rate - growth rate)

Using the information in the question, we identify the following;

Current stock price = $57.50

Expected year end dividend = ?

Required return rate = 10.25%(0.1025)

Growth rate = 6%(0.06)

We can rewrite the equation as ;

Expected year end dividend = Current stock price * (Required return rate - Growth rate)

= 57.5 * (0.1025 - 0.06) = 57.5 * 0.0425 = $2.44375

Hence, the expected year-end dividend D1 = $2.44

Ivan3 years ago
7 0

Answer: D. $2.44

Explanation:

GIVEN the following ;

Required rate of return (r) = 10.25% = 0.125

Price of share (P0) = $57.50

Growth rate = 6% = 0.06

Expected year end dividend(D1)

Price of stock(P0):

= Dividend (D1) ÷ ( rate of return - growrh rate)

$57.50 = (D1) ÷ (0.1025 - 0.06)

$57.50 = D1 / 0.0425

D1 = $57.50 × 0.0475

D1 = $2.44375

Therefore, expected year-end dividend = $2.44

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There are clear differences between branch plan and sequel plan decisions, but what causes one type to be chosen over another? P
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Answer:

Find explanation below.

Explanation:

A branch plan is the contingency plan. It is chosen when planning for future possible occurrences. A Sequel plan on the other hand is made based on the outcome of the main plan. Therefore, a Sequel plan is made depending on whether the main plan was successful or unsuccessful.

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What does an effective business begin with?
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3 0
3 years ago
Blue Angel Investors has a success ratio of 10 % with its venture funding. Blue Angel requires a rate of return of 19.1 % for it
Talja [164]

Answer:

19.10%

Explanation:

The computation of annual percentage rate is shown below:-

Your loan rate states if one out of ten succeeds, after five years, so the nine failure will cover, and if the Blue Angel makes 10 loans of $168,000 each and needs a return of 19.1% on its portfolio of lending, then given amount will have to be accrued after five years.

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