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
77julia77 [94]
3 years ago
9

A stock is expected to pay a dividend of $0.75 at the end of the year (i.e., D1 = $0.75), and it should continue to grow at a co

nstant rate of 6% a year. If its required return is 14%, what is the stock's expected price 3 years from today? Round your answer to two decimal places. Do not round your intermediate calculations.
Business
1 answer:
Vesnalui [34]3 years ago
4 0

Answer:

Stock's expected price 3 years from today = $11.165775

Explanation:

Provided information

and using dividend growth model we have,

D1 = $0.75

g = 6%

Ke = 14%

For cost at the end of 3 years we need to calculate D4

D2 = D1 + g = $0.75 + 6% = $0.795

D3 = D2 + g = $0.795 + 6% = $0.8427

D4 = D3 + g = $0.8427 + 6% = $0.893262

P3 = Price at the end of year 3 = \frac{D4}{Ke - g} = \frac{0.893262}{0.14-0.06}

P3 = 11.165775

You might be interested in
Which expense has to be incurred at the time of Production?<br> a)fixed<br> b)variable
Setler [38]
Both but fixed goes first so a is correct
7 0
2 years ago
Amy has a card shop. She receives a shipment of Valentine's Day cards in December 2011 made by a card manufacture in that month.
Firdavs [7]

Answer:

The contributions of these transactions is a reduction to GDP by $500 in 2011 and an increase in GDP by $800 in 2012.

Explanation:

GDP is the abbreviation for gross domestic product which is the monetary value of all finished products (goods and services) made within a country during a specific period (usually a year). In the determination of a country's GDP, imports are subtracted while exports or sales are added.

Therefore considering that Amy received a shipment of Valentine's Day cards in December 2011 paying a total of $500 and sold all the cards for a total of $800 in February 2012, the contributions of these transactions is a reduction to GDP by $500 in 2011 and an increase in GDP by $800 in 2012.

6 0
3 years ago
Which individual is a producer?
Ronch [10]

Answer:

To be considered as a producer, we need to create some sorts of goods or services and exchange it with the customers in order to obtain some sort of financial gain. I believe that a host who seats customers in a busy restaurant would be considered a producer because he is providing a service to consumers.

Hope this helps!

7 0
3 years ago
Read 2 more answers
If it proves possible to make abnormal profits based on information regarding past stock prices, then the market:___________
Alla [95]

Answer:

a. is weak-form efficient

Explanation:

A weak-form efficient market postulates that the present price of a stock reflects previous all data from past prices.

It suggests that no technical analysis can be of help to the investor.

This implies that fundamental analysis using historical prices and data of a stock can be used to predict stocks that are overpriced or underpriced.

So researching a company's financial statements gives an edge on predicting today's stock price.

Investors can make abnormal profit

4 0
3 years ago
The histogram and box plots below show the distribution of finishing times for male and female winners of the New York Marathon
weeeeeb [17]

Answer:

Kindly check explanation

Explanation:

A.)

From the histogram, the number of runners who made a certain range of Runtime can be easily deduced on the y-axis of the histogram, which isn't possible on the boxplot.

Summary statistic such as lower quartile, median and upper quartile statistics including outliers can be deduced easily from the boxplot.

B.)

Bimodal distribution occurs when two different groups or class have the highest number of values in a distribution.

C.)

The distribution of marathon times for men is fairly normally distributed while that if women is skewed.

The minimum and maximum values in the women's distribution is greater than the minimum and maximum values in the men's distribution.

The women's distribution has greater variance than the men's distribution. (greater range value).

6 0
3 years ago
Other questions:
  • If average product is increasing, then marginal product Select one: a. must be greater than average product. b. must be less tha
    13·1 answer
  • Benefits provide ______ and variable pay provides _____.
    10·1 answer
  • Sonya showed the office manager at Arunden Solutions how he could pay for the new copier she was selling by bringing more of Aru
    14·1 answer
  • Nicolette Garrison works part-time at an independent record store. Whenever her friend, Jacob Barker, comes into the store durin
    7·1 answer
  • As a general rule, a profit-maximizing restaurant owner employs each factor of production up to the point at which the value of
    12·1 answer
  • I NEED HELP ASAP please
    8·1 answer
  • Companies operating in a highly automated environment that produce many different products with varying levels of production sho
    9·1 answer
  • The Baldwin Company has just purchased $40,900,000 of plant and equipment that has an estimated useful life of 15 years. The exp
    10·1 answer
  • Please help me with this I will give you brainiest if you help me correctly
    9·1 answer
  • Equipment cost $67,200 and is expected to be useful for 8 years and have no salvage value. unde the straight line method, monthl
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!