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arsen [322]
3 years ago
13

Newton, Inc. just paid an annual dividend of $0.95. Their dividends are expected to increase by 4% annually. Newton Company stoc

k is selling for $11.54 a share. What is the required rate of return on this stock implied by the dividend-growth model
Business
1 answer:
Eduardwww [97]3 years ago
8 0

Answer:

The required rate of return is 12.2%

Explanation:

Dividend growth model is used to calculate the price of the stock based on the dividend, its growth and required rate of return.

Formula to calculate the price

Price = Dividend / ( Required rate of return - Growth rate )

P = D / ( r - g)

P = $11.54

D = $0.95

g = 4%

Now placing the given values in the formula

$11.54 = $0.95 / ( r - 4% )

r - 4% = $0.95 / $11.54

r - 4% = 8.2%

r = 8.2% + 4%

r = 12.2%

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Answer:

the exchange rate and the trade deficit to decrease.

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Suppose that the office of management and budget provides the accompanying estimates of federal budget​ receipts, federal budget
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hram777 [196]

Answer:

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Explanation:

In MS Excel, on the left hand side below the tool bar there is a small box which tells the cell name where the cursor is clicked, the name of the cell can be changed from here easily, click on the desired cell and then by clicking on the box you can enter the name of the cell. After a cell is renamed the formula can be written by simply putting the name of the cell instead of the original e.g. E13

The formula for average is =AVERAGE(E15,E16).

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Answer:

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