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Phoenix [80]
4 years ago
11

The common stock of Ecolab pays an annual dividend of $1.84 a share. The company has promised to maintain a constant dividend re

gardless of economic conditions. How much would investors be willing to pay for one share of Ecolab's stock assuming an equity cost of capital of 13.6%?
Business
1 answer:
vladimir2022 [97]4 years ago
8 0

Answer:

$13.53

Explanation:

Data provided in the question:

Annual dividend per share, D0 = $1.84

Cost of capital, ke = 13.6% = 0.136

Now,

since,

the dividend remains the constant, the growth rate (g) of the dividend will be 0%

Also,

Current price = [ D0 × ( 1 + g ) ] ÷ [ ke - g ]

= [ $1.84 × ( 1 + 0% ) ] ÷ [ 13.6% - 0% ]

= $1.84 ÷ 0.136

= $13.53

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During risk management activities, 236 risks have been identified which are caused by 13 root causes. You could eliminate 234 ri
alisha [4.7K]

Answer: (D) Accept the risk

Explanation:

 According to the given question, the one of the best solution is to accept the risk as the 2 given risks in the project cannot be removed or also outsourced from the given project scope.

Accepting the risk is one of the risk retention process in which we sometimes cannot avoid the given risk in the risk management and it is commonly found in the various types of investment process and also in the business.

 On the basis of the given scenario, we could not eliminate the two risks in the project so the best solution is to using the risk acknowledgement due to some limitations. Therefore, Option (D) is correct answer.

5 0
4 years ago
The 80/20 principle holds that 20 percent of all customers generate 80 percent of the demand. Although the percentages usually a
myrzilka [38]

Answer: The consumer market segment that is described is the Usage-Rate Segmentation.

Explanation:

This type of consumer market segment is used to determine how much a buyer/consumer uses the product. This put the consumer into a particular category that is used by companies when deciding on their products.

The consumers/customers are put into categories such as the;

  • heavy product users
  • light product users
  • non-users
  • medium product users

Larger companies tend to market towards the heavy product users instead of the other 3 categories.

7 0
3 years ago
In the AD partnership, Allen's capital is $140,000 and Daniel's is $40,000 and they share income in a 3:1 ratio, respectively. T
Mamont248 [21]

Answer:

D) 137000 39000

Explanation:

Allen  140,000

Daniel 40,000

Capital before admission 180,000

share ratio 3:1

Capital after admission:

180,000 + 40,000 = 220,000

David participation: 20%

220,000 x 20% = 44,000

David investment  40,000

goodwill: 4,000

There is a difference in goodwill which will be supported for the old partner as their current share ratio

Allen 4,000 x 3/4 = 3,000

Daniel 4,000 x 1/4 = 1,000

Capital after David admission:

140,000 - 3,000 = 137,000

40,000 - 1,000 = 39,000

6 0
4 years ago
State Farm insurance company prints an ad in a national newspaper’s apartment rental section with a picture of a girl sitting on
Jobisdone [24]

Answer:

Safety and Security

Explanation:

Blow drying your hair over the tub isn't safe

6 0
3 years ago
The central bank buys $15,000 worth of bonds in the open market from Christopher, who
vladimir2022 [97]

Answer:

(a) What is the amount by which Carla Bank's liabilities have changed?

Carla Bank's liabilities increased by $15,000 (bank deposits are liabilities).  

(b) Calculate the change in required reserves for Carla Bank.

Carla Bank's reserves must increase by $15,000 x 5% = $750

(c) What is the dollar value of the maximum amount of new loans Carla Bank can initially make because of Christopher's deposit?

Carla Bank can loan $15,000 x 95% = $14,250

(d) Based on the central bank's open-market purchase of bonds, calculate the maximum amount by which the money supply can change throughout the banking system.

Money multiplier = 1 / 5% = 20

The money supply has the potential to increase by $15,000 x 20 = $300,000

(e) How will the change in the money supply in part (d) affect aggregate demand in the short run? Explain.

Aggregate demand will increase since the total money supply increases. This should also help to decrease the interest rates and foster investment.

4 0
3 years ago
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