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chubhunter [2.5K]
4 years ago
6

Kindzi Co. has preferred stock outstanding that is expected to pay an annual dividend of $4.18 every year in perpetuity. If the

required return is 4.19 percent, what is the current stock price?
Business
1 answer:
Brilliant_brown [7]4 years ago
6 0

Answer:

The current price of the stock is $99.76

Explanation:

The price of a stock which pays a constant dividend throughout for an indefinite period of time can be calculated using the present value of perpetuity formula. The stock qualifies as a perpetuity as it pays a constant cash flow after equal intervals of time and for indefinite time period.

The formula for the present value of perpetuity is,

Present Value = Cash Flow or Dividend / r

Where,

  • r is the discount rate

Present value = 4.18 / 0.0419

Present value = $99.76

So, the current price of the stock is $99.76

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Answer:

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3 0
3 years ago
George Hansen is General Manager for the Marigold Inn in Augusta, Georgia. Sharon Coombs is Restaurant and Food Services manager
stealth61 [152]

Answer:

Correct Answer:

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This is the best logical suggestion to George because, the guests already had the impression that, the inn cannot be able to produce a very high quality and tasty pizza. <em>Preparing "Napoli Pizza" with different information from the Inn is best alternative. the guest would believe that, the pizza is coming from another quality pizza making company.</em>

6 0
4 years ago
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Answer:

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3 0
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Answer:

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4 0
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Answer:

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