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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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2 years ago
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Solution:

The relationship is called the deal to run the company by adding money, by distributing the business risk, etc. We share profit and loss from their relationship and the net profit is the partner's profits.

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Elisa's basis in partnership :

Particulars                                                         Amount $

Cash contribution                                                  200,000

Add:  

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Share of the accounts payable debt                     4,100

Share of partnerships taxable income                    15,000

Hence, Elisha's basis in the partnership on December 30. $299,100

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Ezra's basis in partnership on December 30. $299,100

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Answer:

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Answer:

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