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lina2011 [118]
3 years ago
12

Braxton's Cleaning Company stock is selling for $34.75 per share based on a required returmn of 10.4 percent. What is the the ne

xt annual dividend if the growth rate in dividends is expected to be 3.9 percent indefinitely?
Business
1 answer:
mash [69]3 years ago
5 0

Answer:  Po = D1/Ke + g

               $34.75 = D1/0.104 + 0.039

   $34.75 -0.039 = D1/0.104

                $34.711 = D1/0.104

                        D1  = 34.711 x 0.104

                        D1 = $3.61

Explanation: In this question. there is need to apply the formula for determining the current market price of a common stock. The current market price of a common stock is a function of next dividend capitalised at the appropriate cost of equity plus growth rate. in addition, we need to make the next dividend the subject of the formula.

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2 years ago
Grady exchanges qualified property, basis of $21,833 and fair market value of $26,200, for 60% of the stock of Eadie Corporation
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