The company's equity cost of capital is 8.4%, and a stock is anticipated to perpetually pay $1.25 a share. In ten years, an investor can anticipate paying $14.88 for each share. correct option is (D)
P = D/R = 1.25/0.084 = $14.88
Since, the dividend paid by the company will always be $1.25, the price of stock the share will always remain the same, even after ten years
A security that denotes ownership of a portion of the issuing company is referred to as a stock, also known as equity. Shares, which are units of stock, entitle its owners to a percentage of the company's assets and income based on how many shares they possess.
The cornerstone of many individual investors' portfolios, stocks are mostly bought and sold on stock exchanges. Government rules aimed at shielding investors from dishonest tactics must be followed when trading stocks.
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The complete question is
a stock is expected to pay $1.25 per share every year indefinitely and the equity cost of capital for the company is 8.4%. What price would an investor be expected to pay per share ten years in the future?
A) $37.20.
B) $29.76.
C) $22.32.
D) $14.88.
The state of the environment in south africa can be measured by having these indicators: air quality, biodiversity, water resources, and many more. If these are maintained in high levels, it would mean that environmental sustainability can be obtained. Levels of human impacts should do no harm to the environmental systems to attain and result to sustainability.
Answer:
yes because have been enormously successful at getting their members excellent wages, benefits and working conditions.
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Explanation:
Answer:
Call payoff = Max [0, Stock price - Strike price]
Call payoff = Max[0,25-20]
Call payoff = 5
Put payoff = Max[0, strike price - stock price]
Put payoff = max[0,20-25]
Put payoff = 0
Strike price = K = 20
Stock price = S = 25
interest rate = 10% = 0.1
Time to expiry = T = 3 months = 3/12 = 0.25
Put call parity: C + K*Exp(-r*T) = P + S
C = P + S - K*Exp(-r*T)
Call = 3 + 25 - 20*exp(-0.1*0.25)
Call = 28 - 19.5062 =
Call = 8.4938 > 3
So, yes there is an arbitrage
. Implied value is 8.4938 but trades at 3.00; Call option is trading cheap hence we should buy more call options.
Accounting<span> is the </span>process<span> of constructing and maintaining financials. </span><span>
The framework for the entire accounting process is referred to as</span> definitional framework. The framework<span> provides a categorized structure that classifies the basic elements in </span>accounting. The accounting equality shows that the assets of a business are equal to its equities. This means that Assets = Equities. Assets were defined earlier as the things of value owned by the business, or the economic resources of <span>the business. </span>
