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Paraphin [41]
3 years ago
11

A stock just paid a dividend of D0 = $1.50. The required rate of return is rs = 10.1%, and the constant growth rate is g = 4.0%.

What is the current stock price?a. $23.11b. $23.70c. $24.31d. $24.93e. $25.57
Business
1 answer:
Alex Ar [27]3 years ago
3 0

Answer:

What is the current stock price?

$25.57

Explanation:

The company just paid a Dividend of $1,50, the next year they will pay a Dividend of $1,50 plus 1,04 (Growth rate), Dividend next year = $1,56

To a constant growth of dividends and assuming it's a constant growth we'll  applied the Gordon growth model (GGM), which state that a price per share it's determined by the next formula:

Price per Share = D / (r - g)   Where:

D = the estimated value of next year's dividend

r = The required rate of return

g = the constant growth rate

To this case the value is:  ($1,50 * 1,04) / (10,1%-4%) = $1,56 / 0,061 = $25,57

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8 0
3 years ago
In​ manufacturing, excess capacity can be used to A. do fewer​ setups, lengthen production​ runs, and drive down inventory costs
Aleksandr-060686 [28]

Answer:

In​ manufacturing, excess capacity can be used todo more​ setups, shorten production​ runs, and drive down inventory costs

Explanation:

Excess capacity refers to a situation where a firm is producing at a lower scale of output than it has been designed for. Context: It exists when marginal cost is less than average cost and it is still possible to decrease average (unit) cost by producing more goods and services

7 0
3 years ago
Suppose the incomes of buyers in a market for a particular inferior good decrease and there is also a reduction in input prices.
Natasha_Volkova [10]

Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.

With a decrease in input prices, the producers will be willing to produce more items, but we are unsure if consumers will be able to buy more because they drop in income; therefore, we don't know what the price will do.

5 0
4 years ago
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What is the effect of limited supplies? *
Liula [17]

Answer:

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4 0
3 years ago
Sound your horn __________________. A. to have fun B. to demand the right-of-way C. when necessary to avoid collisions D. to giv
alex41 [277]
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B. Sound your horn to demand the right-of-way is extremely wrong, and incorrect. So, answer B. is incorrect. 

C. You must sound your horn when necessary in order to avoid any collisions. You must do this to help warn and prevent another driver from getting into an accident with you. Therefore, C is correct.

D. Sound your horn to give other driver a piece of your mind. This is also known as road rage, it's not worth doing since you could get distracted while driving, and could lead to serious (sometimes fatal) issues. So, answer D. is incorrect. 

So, as I said above, the correct answer is: C. W<span>hen necessary to avoid collisions 

Good luck with your studies, and I truly hope this helps!~</span>
8 0
4 years ago
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