Answer:
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Answer:
The correct option is b) $12.40.
Explanation:
The stock price can be calculated using the Gordon growth model (GGM) formula that assumes that dividend growth rate will be stable in the long run. The formula is given as follows:
P = d / (r - g) ……………………………………… (1)
Where;
P = Stock price = ?
d = next year dividend = Dividend just paid * (1 + Dividend growth rate) = $1.00 * (1 + 0.054) = $1.00 * 1.054 = $1.054
r = required rate of return = 13.9% = 0.139
g = dividend constant growth forever = 5.4%, or 0.054
Substituting the values into equation (1), we have:
P = $1.054 / (0.139 - 0.054)
P = $1.054 / 0.085
P = $12.40
Therefore, the stock price $12.40. That is, the correct option is b) $12.40.
The stage should be contemplation stage. It's pretty much a stage for them to be prepared and determined.
The shares of stock of the firm are to be treated as independent when there are specific risk attached to them.
Given an incomplete sentence related to insurance principle.
We are required to fill the blank with appropriate word so that the sentence gives appropriate meaning.
The appropriate word which will fit is independent.
Insurance is basically protection from financial loss. It is the form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss. An institution which provides insurance is known as an insurer, an insurance company, an insurance carrier or an underwriter.
Because the shares of stock are different so the company needs to get insurance of each types of shares individually.
Hence the insurance principle relies on the idea that firm-specific risk among different shares of stock is independent.
Learn more about insurance at brainly.com/question/25855858
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Answer:
Because loan has to be paid in certain period of time whereas grant is a special government plan/ scheme for farmers to motivate them to work..