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disa [49]
3 years ago
12

you believe that the Non-stick Gum factory will pay a dividend of $2 on its common stock next year. Thereafter, you expect divid

ends to grow at the rate of 6% a year in perpetuity. If you require a return of 12% on your investment, how much should you be prepared to pay for the stock?
Business
1 answer:
Svetlanka [38]3 years ago
6 0

Answer:

You should pay a stock price of $33.33

Explanation:

We can use the formula below to calculate the price per share that you would be willing to pay;

RRR=(EDP/SP)+EDGR

where;

RRR-required rate of return

EDP-expected dividend payments

SP-share price

EDGR-expected dividend growth rate

This can also be written as;

Required rate of return=(Expected dividend payments/share price)+expected dividend growth rate

In our case;

RRR=12%=12/100=0.12

EDP=$2

SP=unknown

EDGR=6%=6/100=0.06

replacing;

0.12=(2/SP)+(0.06)

0.12-0.06=(2/SP)

0.06=(2/SP)

0.06 SP=2

SP=2/0.06

SP=33.33

You should pay a stock price of $33.33

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4 years ago
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8 0
3 years ago
Perry, Quincy, and Renquist had shared profits and losses in a ratio of 2:4:4. Liquidation expenses were expected to be $8,000.
ch4aika [34]

Answer:

Any amount above $88,000

Explanation:

$ 95,00

Cash                              $90,000

liquidation expenses    ($8,000)

<u>Liabilities                    ($170,000)</u>

net                               ($88,000)

The partnerships needs to sell its noncash assets for at least $88,000 to cover its liquidation costs and liabilities. Any additional cash received through the sale of the noncash assets should be distributed in the liquidation ratio 2:4:4.

E.g. they sell the noncash assets for $90,000, they will distribute $2,000 (=$90,000 - $88,000):

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3 years ago
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miss Akunina [59]

Answer:

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Explanation:

The best solution in this case first would be to neutralize the rumor and confirm the true news.

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When there is bad news involving the organization, it is most correct for the leader himself to communicate to the employees, as this shows a sense of transparency, increases the understanding of stakeholders, as it is known that setbacks are normal, and avoid rumors and failures. communication, which can lead to greater conflicts and further complicate problem resolution.

6 0
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