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Margaret [11]
2 years ago
11

Company X has 100 shares outstanding. It earns $1,000 per year and expects to pay all of it as dividends. If the firm expects to

maintain this dividend forever, calculate the stock price after the dividend payment. (The required rate of return is 10 percent.)
Business
1 answer:
Leno4ka [110]2 years ago
4 0

Answer:

The stock price after the dividend payment is $100 per share

Explanation:

According to the data the Dividend per year is $1,000  and the Required Rate of Return is 10% .

Hence, in order to calculate the stock price after the dividend payment we have to use the following formula first:

Stock price = [Total Dividend amount / Required rate of return]

Stock price  = [$1,000 / 0.10]

Stock price = $10,000

Finally the Stock price after the dividend payment. = [Total Stock Value / Number of outstanding shares]

Total Stock value = $10,000

Number of outstanding shares = 100 shares

Stock price after the dividend payment = [$10,000 / 100 shares]

Stock price after the dividend payment = $100 per share

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Heather Hudson makes stuffed teddy bears. Recent information for her business follows: Selling price per bear $ 32.50 Total fixe
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Answer: 26.5% increase

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Current profit = Sales - Variable costs - fixed costs

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New profit;

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Effect of sales increase = ( 5,492 - 4,340) / 4,340

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Lloyd is a divorce attorney who practices law in Florida. He wants to join the American Divorce Lawyers Association (ADLA). The
Rasek [7]

Answer:

13 years

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Scarcity is a condition that is everywhere and always, since it is based upon two assumptions that reflect permanent universal c
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3 years ago
a company had net revenues of $1,800,000 and total expenses of $800,000, not including income taxes. it paid $300,000 in dividen
Gnesinka [82]

The company's total expenses, excluding income taxes, were $800,000, with net revenues of $1,800,000. It distributed dividends of $300,000. and it has a net income of $1,000,000 before taxes.

Net revenues = $1,800,000

Less: Total expense = $800,000

Net income before tax = $1,000,000

A dividend is a payment made by a company to its shareholders out of its profits. When a business generates a profit or surplus, it can distribute a portion of that profit to shareholders in the form of a dividend. Any unused funds are retained and reinvested back into the company. Both the profit from the current year and the retained earnings from prior years are available for distribution; a corporation is typically not allowed to pay a dividend out of its capital.

The amount that is distributed to shareholders may be paid in cash (typically a deposit into a bank account) or, if the company has a dividend reinvestment plan, it may be paid by the issuance of additional shares or the repurchase of shares.

To learn more about Dividends visit here:

brainly.com/question/28044310

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8 0
10 months ago
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