1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
gladu [14]
3 years ago
8

The Lo Company earned $2.60 per share and paid a dividend of $1.30 per share in the year just ended. Earnings and dividends per

share are expected to grow at a rate of 5 percent per year in the future. Determine the value of the stock if the required rate of return is 12 percent.
Business
1 answer:
Kitty [74]3 years ago
3 0

Answer:

Price of stock is $18.57

Explanation:

Dividend growth method measures the stock value by taking sum of present value of all future cash flows means present value of all future dividends.

Use following formula to calculate the price of stock

Price = Dividend / Rate of return - Growth rate

According to given data

Dividend = $1.30

Required rate of return = 12%

Growth rate = 5%

Price = $1.3 / ( 12% - 5% )

Price = $1.3 / 7%

Price = $18.57

You might be interested in
How would I put the reason I left my job simply and professionally if this was the reason: I left my job due to my drivers ed sc
Alenkinab [10]
I think that you could say it mostly like that by make your words more descriptive, I don’t really know what your going for tho
5 0
3 years ago
How to become a firefighter. I want to become one.
ladessa [460]

Answer:

-valid driver's license

- 18 years old or more (for  younger than 18 you can look into limited involvement as a junior firefighter.)

- At least a high school diploma or GED.

- pass the physical ability test.

- Pass the written exam

- pass the interview

-You’ll still need to attend a department’s academy once hired

(may be differnt depending on your state, country, etc)

<3

5 0
3 years ago
What percentage does a bank expect you to put down on a house
myrzilka [38]
Hhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh
5 0
4 years ago
Read 2 more answers
Following are transactions for Valdez Services, a company owned by Brina Valdez. A. Brina Valdez invested $20,000 cash in the co
Sphinxa [80]

Answer:

Transactions that create revenue :

Transaction B

Transaction C

Transaction D

Journal Entries :

<u><em>Transaction B</em></u>

Cash $900 (debit)

Sales Revenue $900 (credit)

<u><em>Transaction C</em></u>

Cash $10,000 (debit)

Unearned Revenue $10,000 (credit)

<u><em>Transaction D</em></u>

Cash  $3,500 (debit)

Accounts Receivable  $3,500 (credit)

Explanation:

Transactions that create revenue

Hint ; Revenue is the increases in income that results in increases in assets and decreases in liabilities

3 0
4 years ago
According to the official measure of poverty, in 2009 the poverty rate of families in the United States was Select one:
Svetlanka [38]

Answer:

I think (a).

Explanation:

l am not sure about it

3 0
3 years ago
Other questions:
  • _____ is the total value of all the finished goods and services produced in a country over a certain period of time
    5·1 answer
  • Refer to the original data. assume that the company sold 18,000 units last year. the sales manager is convinced that a 10% reduc
    6·1 answer
  • A government experienced significant loss of certain roadways and bridges as a result of major flooding. Which of the following
    7·1 answer
  • The following data (in thousands of dollars) have been taken from the accounting records of Karmint Corporation for the just com
    7·1 answer
  • Which methods predicts the amount by which the value of a firm will change if a project is accepted?
    8·1 answer
  • What is licensure? I’m doing intro to business
    12·1 answer
  • 8. A major electronics firm holds various committee meetings to improve employee morale. However, upper management discovers tha
    14·2 answers
  • A cafeteria serving line has a coffee urn from which customers serve themselves. Arrivals at the urn follow a Poisson distributi
    7·1 answer
  • A parent company received dividends in excess of the parent company’s share of the subsidiary’s earnings subsequent to the date
    9·1 answer
  • Direct Materials Variances Bellingham Company produces a product that requires 2.5 standard pounds per unit. The standard price
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!