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PSYCHO15rus [73]
3 years ago
15

The Drogon Co. just issued a dividend of $3.00 per share on its common stock. The company is expected to maintain a constant 6.2

percent growth rate in its dividends indefinitely. If the stock sells for $60 a share, what is the company’s cost of equity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places.
Business
1 answer:
Mars2501 [29]3 years ago
5 0

Answer:

The company’s cost of equity is 11.51%.

Explanation:

Please find the below for detailed explanations and calculations:

The company's cost of equity need to be found is the discounted rate that will bring net present value of its projected future dividend to its current stock price.

Denote cost of equity need to be found is x.

We apply the formula to calculated the present value of growing perpetuity to find x as shown below:

[ 3 x ( 1+0.062) ] / ( x - 0.062) = 60 <=> 3.186 / ( x - 0.062) = 60 <=> x = 11.51%.

Thus, the company's cost of equity is 11.51%.

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olga2289 [7]

Answer:

C) made up of two or more individuals who are associated with one another in ways not prescribed by the formal organization.

Explanation:

Informal work groups  are formed voluntarily by workers in a business or organization where a connection exists between the members of the group.

Informal groups generally agree upon who will lead them and are able to succeed due to the bond that is created between the group members that helps them accomplish tasks.

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2 years ago
The condition of a country's ____ depends on its people's ability to exchange money for goods and services.
inna [77]

I believe the answer is: Economy

Economic growth in a country is measured with something called GDP (Gross Domestic Product) . GDP is calculated by counting all goods and services that produced by the nations in one year. Assuming that the market is in an equilibrium, the amount of GDP usually really close to people's purchasing power (ability to exchange money for goods and services.)

3 0
3 years ago
Read 2 more answers
Constant Dividend Growth Valuation Boehm Incorporated is expected to pay a $3.00 per share dividend at the end of this year (i.e
DerKrebs [107]

Answer:

The value of the stock today is $33.33

Explanation:

The constant growth model of the DDM approach will be used to calculate the value of this stock today.

The formula for Value of the stock today using the constant growth model is,

V or P0 = D1 / r - g

The Value of the stock today is,

V or P0 = 3 / (0.13 - 0.04)

V or P0 = $33.33

5 0
2 years ago
how long will it take 13,000 to grow to 18,000 if the investment earns at the interest rate of 3% compunded monthly
kondaur [170]

Answer:

130 months

Explanation:

The computation of the time period is shown below:

Given that

Present value = $13,000

Future value = $18,000

PMT = $0

RATE = 3% ÷ 12 = 0.25%

The formula is shown below:

= NPER(RATE;PMT;-PV;FV;TYPE)

The present value comes in positive

After applying the above formula, the time period is 130 months

Therefore the time that should be needed is 130 months

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2 years ago
What problems might face a company that focuses mainly on its most profitable customers?
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Although the customer is unquestionably the cornerstone to a successful organization, client centricity has several drawbacks, ranging from financial to innovation-related areas.

The drawabacks can be listed as:

  • <u>Budget-Cost</u>

Businesses create customer-focused policies in an effort to impress and keep consumers, but doing so can be expensive and may not be financially prudent.

  • <u>Not every customer is equivalent!</u>

Although the customer is always right, not all customers are suitable for your company. So, building just a customer based approach can harm your business.

  • <u>Customers are unsure too!</u>

Many marketers feel that if a company is consumer-focused, it will learn what the clientele truly desires and prosper.

While it's crucial for businesses to pay attention to their customers, they also need to know when to shift their attention away from them.

  • <u>Love the Customer, but Don't Expect Love in Return</u>

According to conventional knowledge, clients are more loyal to companies that go above and beyond their expectations; nonetheless, your customers may betray you in order to get the cheap, satisfying solutions they actually desire.

To know more about the topic, refer to:

brainly.com/question/20935329

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3 0
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