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Marianna [84]
3 years ago
9

The Red Bud Co. pays a constant dividend of $1.80 a share. The company announced today that it will continue to do this for anot

her 2 years after which time they will discontinue paying dividends permanently. What is one share of this stock worth today if the required rate of return is 7.4 percent?
Business
1 answer:
Naddika [18.5K]3 years ago
8 0

Answer:

One share of this stock worth today if the required rate of return is 7.4 percent is $ 3.24

Explanation:

According to the details the dividend for the next 2 years = $1.80 a share and the required return is=7.40%.

Hence to calculate current price of stock we have to use the following formula:

current price= present value of future cash flows

current price=$1.80/1.074 + $1.80/1.074∧2

current price= $ 3.24

current price of stock is $ 3.24

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Answer:

The Matching Principle

Explanation:

The Matching Principle of accounting holds that revenues should be matched with expenses. Hence the name.

This is to say, that revenues should only be recognized when the associated expenses with those revenues have been spent.

For example, in numeral a), we can see that Norfolk Southern Corporation recieved cash in advance, but it only recognized revenue once it had performed the services associated with that cash collection.

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If $360 is invested at an interest rate of 4% per year and is compounded quarterly, how much will the investment be worth in 18
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The answer is $736.96
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What are some things to look for when choosing a credit card? what does the video suggest about credit cards?
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