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Alika [10]
3 years ago
11

LED​ Corp.'s common stock paid​ $2.50 in dividends last year ​(D0​). Dividends are expected to grow at a 12minuspercent annual r

ate forever. If​ LED's current market price is​ $40.00, and your required rate of return is 23​ percent, should you purchase the​ stock?
Business
1 answer:
frozen [14]3 years ago
6 0

Answer:

No, you should not purchase the stock as the stock is over priced.

Explanation:

Stock Price should be

Stock Price = Dividend last year / Required Rate of Return

                   = $2.50 / 23%

                   = $10.86

The current market price of the stock is $40 so the stock is over priced as it is $10.86 that is why you should not purchase the stock.

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Softa [21]

Answer:

The answer is "1.93 years".

Explanation:

Macaula \ \ duration \ \ \ \ \ \ \ \ \ \ 1000 \times 8\%\\\\

years \ \ \ \   cash \ flows \ \ \ \  pv\ of \ 6\%\ \ \ \ present \ value \ \ \ \ current \ value \ \ \ \  pv/current \ value \ \ \ \frac{pv}{cp}\times t\$80.00\ \ \ \ \ \ \ 0.9434 \ \ \ \ \ \ \ \$75.472 \ \ \ \ \ \ \ \$1,036.67 \ \ \ \ \ \ \ 0.0728 \ \ \ \ \ \ \ 0.0728\\\\\$ 1,080.00 \ \ \ \ \ \ \ 0.8900 \ \ \ \ \ \ \ \$961.196 \ \ \ \ \ \ \ \$1,036.67 \ \ \ \ \ \ \ 0.9272 \ \ \ \ \ \ \ 1.8544\\\\

                                             \$ 1,036.668 \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \  \ \ \ \ \ \ \ \   1.92772\\\\

that's why the Macaula duration is 1.93 years.

7 0
3 years ago
Select the correct definition of the term "comparative advantage." the ability to produce a good or service at a lower opportuni
lana66690 [7]

Answer:

The correct answer is: the ability to produce a good or service at a lower opportunity cost than another.

Explanation:

Comparative advantage implies the ability to produce a good at lower opportunity cost. Opportunity cost is the cost of giving up the alternative.

A nation is considered to be enjoying a comparative advantage in the production of a good if it can produce the good at a relatively lower opportunity cost than other nations.

A nation is said to be specializing in the production of a commodity if it has a comparative advantage in production.

7 0
3 years ago
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charle [14.2K]
I'm pretty sure it's trucking.
7 0
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Answer:

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if Carson is getting $2,700 each week

Carson will hit the OASDI limit in   ($137,700/$2,700) weeks = 51 weeks.

Explanation:

6 0
4 years ago
One key role marketing plays in a​ company's strategic planning is to​ __________.
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<span>This allows the company to have a guiding philosophy that it can follow at all times. By having a company mission and a purpose, the business can make certain that all decisions and moves are made with this purpose and philosophy in mind.</span>
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