Answer:
Price of stock = $49.5
Explanation:
<em>The Dividend Valuation Model(DVM) is a technique used to value the worth of an asset. According to this model, the value of an asset is the sum of the present values of the future cash flows would that arise from the asset discounted at the required rate of return. </em>
If dividend is expected to grow at a given rate , the value of a share is calculated using the formula below:
Price of stock=Do (1+g)/(k-g)
Do - dividend in the following year, K- requited rate of return , g- growth rate
DATA:
D0- 2.7
g- 10%
K- 16%
Price of stock = ( 2.7×1.1)/(0.16-0.1) = 49.5
Price of stock = $49.5
<span>A brand developed by a retailer and/or wholesaler that is available only in selected retail outlets is called a private-label brand. Private label branding is manufacturing of goods/ services by one company but it is known by the name of another one. The benefits of such an economical strategy are : the competition is reduced, whereas margins are increased as well as customers' loyalty.<span>
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Answer:
$55,902 is the amount I can expect to earn in the fourth year
Explanation:
Remember Salary increases by 10% each year
Salary in Year 1 : 42,000
Salary in Year 2: 42,000 x 1.1 = $46,200
Salary in Year 3: 46,200 x 1.1 = $50,820
Salary in Year 4: 50,820 x 1.1 = $55,902
<span>D. The product is a necessity.</span>
