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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!

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When a certain competitive firm produces and sells 100 units of output, marginal revenue is $80. When the same firm produces and
Assoli18 [71]

Answer:

d. This cannot be determined from the given information

Explanation:

To find the average revenue of 200 units it is necessary to know the total units. However, the function of the marginal revenue is not given. It is impossible to infer the marginal revenue (price) of other units (of output) only from knowing the marginal revenue of the 100th unit.

6 0
3 years ago
Yummy Foods purchased a two-year fire and extended coverage insurance policy on August 1, 2016, and charged the $4,320 premium t
Sati [7]

Answer:

Prepaid insurance.......Dr 3,420

To Insurance expense 3,420

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Explanation:

6 0
3 years ago
Elway Company purchases land for $85,000 cash. Elway assumes $2,500 in property taxes due on the land. The title and attorney fe
defon

Answer:

c. $90,700

Explanation:

The computation of the cost of the land is shown below:

= Purchase cost of land + property taxes + attorney fees + land graded cost

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3 0
3 years ago
The Phelps Company's common stock is currently trading for $25.50 per share. The stock is expected to pay a $2.80 dividend at th
Lynna [10]

Answer:The correct option is C  = 0.98%

Explanation:

Ok so we do 25.50 - 2.80 because its being taken out

then we divide the answer we get by 10

or multiply it by .10

Hope this helps :)

3 0
3 years ago
What disadvantage a They would be ineligible to receive b. They would receive only a partal benefit for as long as they collect
ArbitrLikvidat [17]

The correct answer is B:They would receive only a partial benefit for as long as they collect Social Security. The age at which Americans are eligible to receive full Social Security benefits is 65. The earliest age, assuming one is not disabled, one can apply for Social Security is 62. However, if an individual claims Social Security early between the ages of 62-64, it will be at a reduced rate.

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