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
VikaD [51]
3 years ago
8

Hudson Corporation will pay a dividend of $2.82 per share next year. The company pledges to increase its dividend by 3 percent p

er year indefinitely. If you require a return of 10 percent on your investment, how much will you pay for the company’s stock today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Business
1 answer:
Brilliant_brown [7]3 years ago
5 0

Answer:

An investor will be willing to pay $40.29 for this stock.

Explanation:

A constant growth dividend discount model will be used in this case because Hudson Corporation is expected to grow at a constant rate. The formula to be used is:

Price = Expected Dividend (Dividend of Year 1) / Required Return - Growth Rate

                                                          OR

Price = 2.82 / (.1 - .03) = 2.82 / .07 = $40.29.

Thanks!

You might be interested in
To allocate scarce goods and resources, a market economy uses . This means that individuals will get the goods and services if t
4vir4ik [10]

Answer:To allocate scarce goods and resources, a market economy uses non-price rationing preferential treatment price rationing . this means that individuals will get the goods and services if they have the ability to pay meet the government's requirements stand in line at the store.

Explanation: hope this helps u! (:

4 0
3 years ago
Steve went to his favorite hamburger restaurant with $3, expecting to buy a $2 hamburger and a $1 soda. when he arrived he disco
inysia [295]
The answer is The income effect. 
Income effect is described as the change in demand of a service or good brought on by change in the income of a consumer.It is observed in two cases first is when income of person increases and second is when price of goods or service decreases. 
The scenario given in the question is an example of second case as the price of burger was less than normal Steve perceived his income to be able to buy more product in same price
8 0
3 years ago
Today, you deposit $2,500 of cash in a savings account that earns 8.0% in annualized interest. One interest payment is received
Artemon [7]

Answer:

a. $173

Explanation:

The computation of the amount of interest earned in five years is shown below;

But before that following calculations need to be done

As we know that

Simple interest = Present value × rate of interest × time period

= $2,500 × 8% × 5

= $1,000

Now the future value is

Future value = Present value × (1 + rate of interest)^number of years

= $2,500 ×(1 + 8%)^5

= $2,500 × 1.4693280768

= $3,673

Now the compound interest is

Compound interest = Future value - Present value

= $3,673 - $2,500

= $1,173

Now interest on interest is

Interest on interest = Compound interest - Simple interest

= $1,173 - $1,000

= $173

3 0
2 years ago
New greenbelt areas have been created to beautify the grounds around tampa power and light company. the greenbelt areas are an e
Alexandra [31]
The areas are an example of <span>a decrease in the price and an increase in the quantity of the firm's output.
The green areas would decrease the amount of money that the company need to handle waste of production, and social responsibility related cost, which would decrease the price and increase the firm's output.</span>
3 0
3 years ago
Read 2 more answers
Once I click the link to go the quiz I have one hour to complete it before I get kicked out of the page. It is due tonight befor
Ratling [72]
That kinda sucks. how’s it going for you
3 0
3 years ago
Other questions:
  • On January 1, 2016, Hess Co. purchased a patent for $1,904,000. The patent is being amortized over its remaining legal life of 1
    11·1 answer
  • You are the only seller of eggs in town, and the price-elasticity coefficient for eggs is known to be 0.8. if you want to increa
    11·1 answer
  • Television producers hope to "minimize the risk" that a tv show _____. will offend the public will be a copy of something that's
    10·1 answer
  • At an inflation rate of 7 percent, the purchasing power of $3 would be cut in half in 10.25 years. how long to the nearest year
    13·1 answer
  • At nick's bakery, the cost to make homemade chocolate cake is $3 per cake. as a result of selling three cakes, nick experiences
    9·1 answer
  • Currency Transaction Reports mandated by Anti-Money Laundering rules require a report to be filed in which of the following situ
    5·1 answer
  • An investment property with 10 residential units rents for $2,000 per unit per month. The rate of vacancy and collection loss is
    9·1 answer
  • A company has inventory of 17 units at a cost of $11 each on May 1. On May 5, they purchased 11 units at $16 per unit. On May 12
    14·1 answer
  • has a standard of 2 direct labor hours per unit. The standard wage rate of each worker is $32.50 per hour. In July, the company
    5·1 answer
  • Use your knowledge of what drives employee performance to complete the sentence.
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!