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 to make flavored soft serve ice cream fresh ingredients?
RSB [31]
Soft Serve ice cream has been around since the 1930's, with a large milk base proteins to achieve the desired soft texture. This style of ice cream is characterized by light flavor and rich creamy texture. To make soft serve ice cream you will need a combination of whole milk, heavy cream, sugar, salt, dry ice and your desired flavorings. You will need to blend the core ingredients together then churn in the crushed dry ice to achieve the desired texture. You can mix in a variety of fresh fruits in the blending process, and you can also juice them prior to the churning process. 
7 0
3 years ago
Read 2 more answers
A text only forum accessed through a bulletin board service (BBS) is known as a ____.
Vinvika [58]

Answer:

its B don't listen to stupid people

Explanation:

8 0
3 years ago
Read 2 more answers
An inventory error not only affects the current year's cost of goods sold, gross profit, net income, current assets and equity,
pychu [463]

The correct answer is "ending inventory of one period is the beginning inventory of the next period."

An inventory error not only affects the current year's cost of goods sold, gross profit, net income, current assets, and equity, but also the next period's statements because ending inventory of one period is the beginning inventory of the next period.

That is why the manager has to be strict regarding the inventory of a company. Inventory has a cost that can be translated into money. So accountants have to be perfect regarding the inventory. So yes, ann error in keeping the inventory affects the company in that the ending inventory of one period is the beginning inventory of the next period. An internal audit can reveal the mistakes in accurately keeping the inventory. So it is better to put extra attention in the process so nothing wrong would be revealed after the audit.

7 0
3 years ago
What is the purpose of the sherman antitrust act
tamaranim1 [39]
To destory monopolies that were using their power to harm society.
7 0
3 years ago
Read 2 more answers
fitness center is planning to invest in specialized exercise equipment. This equipment is highly effective, but the club members
cricket20 [7]

Answer:

b. job and technical training

Explanation:

The job and the technical training is the training which is to be provided by the company or the centers  to the workers or the people who want to trained in a particular service or specialized in a service  in order to get a better and satisfying job through which they can build their career in a better way  

In the given situation, the fitness center send the instructors to the certified training program to learn how to use these machines correctly that reflects the job and technical training

8 0
3 years ago
Other questions:
  • Suppose the money supply (as measured by checkable deposits) is currently $850 billion. The required reserve ratio is 20%. Banks
    11·1 answer
  • If the marginal cost of production is greater than the average cost, in what direction must the average cost be changing, if any
    14·1 answer
  • You produce T-shirts, and it costs $3 to make each shirt. If you choose a price of $5 for each shirt, then you will _____.
    14·1 answer
  • Prior to working at a VITA/TCE site, ALL VITA/TCE volunteers (greeters, client facilitators, tax preparers, quality reviewers, e
    8·1 answer
  • Fresh Veggies, Inc. (FVI), purchases land and a warehouse for $520,000. In addition to the purchase price, FVI makes the followi
    13·2 answers
  • ​________ occurs when economic benefits are distributed fairly. A. Equity B. Allocative efficiency C. Equality D. Productive eff
    12·1 answer
  • At December 31, 2016, House Co. reported the following information on its balance sheet.
    15·1 answer
  • The primary role of a functional strategy is to unify the company's various operating-level strategies. specify how to build and
    8·1 answer
  • Business Rental Corporation (BRC) and Cartage Trucking Companyenter into a contract for a lease of ten hydraulic lifts. Under th
    7·1 answer
  • According to msrb rules, if a control relationship exists between an issuer and a municipal securities dealer, the nature of tha
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!