1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
mestny [16]
3 years ago
11

ABC Inc. just paid a dividend of $1.00 this year. The stock price is $15.43 currently. The market risk premium is 15% and the ri

sk-free rate is 6%. What will the price of ABC's stock be if the dividend growth increases by 25%?
Business
1 answer:
mariarad [96]3 years ago
4 0

Answer:

Price lowers and becomes negative or -5.37 dollars

Explanation:

Market risk premium's formula could be written as dividends/price + dividend's growth rate. Therefore, we dividend growth rate according to the current price and dividend level equal to market risk premium - dividends/price or 0.15 - 1/15.43 = 0.086 or 8.6%. If the dividend growth rate rises by 25% than new one is 33.6%. Price is equal to dividends/market risk premium - dividend growth rate or in this case 1/0.15-0.336 or 1/-0.186 or -5.37 dollars. If the price is negative that would mean that any future selling of the stock would mean that ABC would have to pay in order to sell it.

You might be interested in
Juan, the owner of quality catering, is driven by competition. he is very focused on meeting deadlines and quality, and on deliv
Gnoma [55]
I would say that quality catering has a production-oriented culture where meeting production targets on time is prime and the fact that the manager rewards the meeting of those targets is good but he shouldn't ignore the need for employee development and satisfaction as that could have an adverse effect in the long term. 
3 0
3 years ago
If you have a questioned item on your travel account bill, with whom do you first try to resolve it?
Luda [366]
If you have a questioned item on your travel account bill, the first person you should contact in this situation is: The merchant
Before you contact the producer of the card,you need to make sure that:
- The merchant did not falsely include the unknown item in your purchasing price, or
- YOU include the unknown item but you forget about it
5 0
3 years ago
A materials requisition slip showed that direct materials requested were $96000 and indirect materials requested were $15000. Th
ki77a [65]

Answer:

See the attached table for answer.

Explanation:

6 0
3 years ago
The way Professor Quinn chose to handle this situation illustrates the difficulty of dealing with ethics violations. Listed as f
VashaNatasha [74]

Answer:

Option A. Establishing a code of ethics

Option B. Providing support for whistleblowers

Option D. Referring ethical dilemmas to an ethics committee

Explanation:

Professor Quinn had chosen all of the options except providing ethics tainings for the employees because every employee have minimum ethics knowledge.

Having code of ethics builds a sense of better dealings in a work environment. It also triggers a sense of ethical values that an oganization wants to promote among its employees.

Providing support for whistleblowers help in identifying potential threats and risks associated with human resource and company assets. It also help in enfocing ethical values which can't be compromised.

Referring ethical dilemmas to the Ethics Committee will enable resolving of conflicts within an organization on a timely basis.

4 0
3 years ago
Statement of Shareholders' Equity You may use the attached spreadsheet to help you complete this activity, but you are not requi
svlad2 [7]

Answer:

POWDER COMPANY Statement of Shareholders' Equity For Year Ended December 31, 2019:

Preferred Stock $100 par  $126,800

Common Stock $5 par $46,400

Additional Paid-in Capital on Preferred Stock $31,700

Additional Paid-in Capital on Common Stock $73,100

Retained Earnings $206,494

Total Shareholders' Equity $484,494

(See calculations below:)

Explanation:

a) Statement of Shareholders' Equity: This is a financial statement under the balance sheet which a company issues to show the changes within the equity section of the balance sheet over a designated period of time.

b) Preferred Stock $100 par $92,800

New Issue, 340                     $34,000

Total $126,800

c) Common stock, $5 par = $37,400

New Issue, 1,800 shares  =   $9,000

Total $46,400

d) Additional paid-in capital on preferred stock 21,500

From new issue of 340 by $30 per share         10,200

Total $31,700

e) Additional paid-in capital on common stock $58,700

From New Issue 1,800 by $8 per share             $14,400

Total $73,100

f) Retained earnings    =      $185,700

 Net Income for the year     $38,950

Less Dividends: Preferred -$8,876 ($7 x 1,268 shares)

Less Dividends: Common -$9,280 ($1 x 9,280 shares)

Retained Earnings balance $206,494

6 0
2 years ago
Other questions:
  • Old economy traders opened an account to short sell 1,500 shares of internet dreams at $50 per share. The initial margin require
    11·1 answer
  • The natural rate of unemployment will help determine
    5·2 answers
  • A COMPANY HAS RECENTLY OURSOURCED ITS PAYROLL PROCESS TO A THIRD-PARTY SERVICE PROVIDER. AN AUDIT TEAM WAS SCHEDULED TO AUDIT PA
    14·1 answer
  • Multiple Choice Question 64 Concord Company had the following department information about physical units and percentage of comp
    11·1 answer
  • According to the U.S. Census Bureau’s Current Population Survey, the mean and median 2014 income of people aged 25 – 34 years wh
    8·1 answer
  • "Other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quan
    8·1 answer
  • On January​ 1, 2018, McHenry Manufacturing Corporation purchased a machine for $ 40 600 000. ​McHenry's management expects to us
    5·1 answer
  • Pandora pioneered a new way to broadcast music. This kind of breakthrough of creating ________ ways to solve old problems or mee
    9·1 answer
  • Edgar Co. acquired 60% of Stendall Co. on January 1, 2013. During 2013, Edgar made several sales of inventory to Stendall. The c
    15·1 answer
  • One exabyte = 1,000 <br>A. petabytes <br>B.megabytes <br>C. gigabytes <br>D. nanobytes​
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!