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Pani-rosa [81]
3 years ago
8

A company currently pays a dividend of $2.40 per share. The current price of the stock is $18.22. It expects the growth rate of

the dividend to be 2.5% (0.025) annually. What is the required return rate for this stock according to the dividend-discount model
Business
1 answer:
bogdanovich [222]3 years ago
5 0

Answer:

The required rate of return is 16%

Explanation:

The constant growth model of the DDM is used whenever the dividends are expected to grow at a constant rate in the future forever. The formula for the constant growth model to calculate the price of the share today is,

P0 = D1 / r-g

Where D1 is dividend next year or D0 *(1+g)

r is the required rate of return

g is the growth rate in dividends

Plugging in the available variables, we can calculate the required rate of return (r).

18.22 = 2.4 * (1+0.025) / r - 0.025

18.22 * (r-0.025) = 2.46

18.22r - 0.4555 = 2.46

18.22r = 2.46 + 0.4555

r = 2.9155 / 18.22

r = 0.1600 or 16.00%

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Which hr competency refers to the ways hr employees guide others in the organization?
Kazeer [188]

The HR consultation is the branch of Hr competence which refers to the ways hr employees guide others in the organization.

<h3>What is an HR consultation?</h3>

This refers to the practice of delivering all aspects of human resource management as an external provider including client development, contracts and client management.

Therefore, the HR consultation is the branch of Hr competence which refers to the ways hr employees guide others in the organization.

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8 0
2 years ago
As companies started to seek scale economies and efficiency, their goal was to take advantage of ­­­­­­­____________ in function
allsm [11]

Answer: e. Both b & d

Explanation:

Economies and Efficiency can be achieved by managing costs better. This can be done by training employees more so that they may use deep skills gained to be able to keep costs low by being more efficient on the job.

A good place to reduce costs would be the common costs. The business can target these costs by optimising them which means to reduce costs while still maximizing output and value. Reducing the costs here would lead to better efficiency.

7 0
3 years ago
A trucking company sold its fleet of trucks for $56,800. The trucks originally cost $1,496,000 and had Accumulated Depreciation
MatroZZZ [7]

Answer:

the trucking company recorded<em> a</em><em> </em><em>loss on disposal of $152,200 </em>when it sold the fleet of trucks.

Explanation:

Open the Truck Disposal T-Account as Follows:

Debits :

Cost                                                      $1,496,000

Totals                                                    $1,496,000

Credits:

Cash Receipt                                           $56,800

Accumulated Depreciation                $1,287,000

Profit and Loss (Balancing figure)         $152,200

Totals                                                   $1,496,000

<em>Therefore, there was a loss on disposal of $152,200</em>

5 0
3 years ago
Read 2 more answers
If a firm has invested in corporate bonds, it may engage in a financial futures contract in order to protect itself from :______
tigry1 [53]

Answer:

b. rising interest rates.

Explanation:

A bond can be defined as a debt or fixed investment security, in which a bondholder (creditor or investor) loans an amount of money to the bond issuer (government or corporations) for a specific period of time.

Generally, the bond issuer is expected to return the principal at maturity with an agreed upon interest to the bondholder, which is payable at fixed intervals.

The par value of a bond is its face value and it comprises of its total dollar amount as well as its maturity value. Also, the par value of a bond gives the basis on which periodic interest is paid. Thus, a bond is issued at par value when the market rate of interest is the same as the contract rate of interest. This simply means that, a bond would be issued at par (face) value when the bond's stated rated is significantly equal to the effective or market interest rate on the specific date it was issued.

In Economics, bonds could either be issued at discount or premium.

Generally, if a business firm has invested in corporate bonds, it may engage in a financial futures contract in order to protect itself from rising interest rates.

3 0
2 years ago
Pfizer Inc., a pharmaceutical company, reported net income for fiscal 2016 of $7,215 million, retained earnings at the start of
Kisachek [45]

Answer:

$71,774 million

Explanation:

Given that,

Beginning retained earnings = $71,993 million

Net income = $7,215 million

Dividends = $7,448 million

Other transactions = $14 million

Balance of retained earnings at the end of the year:

= Beginning retained earnings + Net income - Dividends + Other transactions

= $71,993 million + $7,215 million - $7,448 million + $14 million

= $71,774 million

Therefore, the balance of retained earnings at the end of the year is $71,774 million.

7 0
3 years ago
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