Complete Question:
BenchMark, Inc., just paid a dividend of $3.45 on its stock. The growth rate in dividends is expected to be a constant 5 percent per year indefinitely. Investors require a return of 13 percent on the stock for the first three years, a return of 11 percent for the next three years, and then a return of 9 percent thereafter. What is the current share price for the stock.
Answer:
BenchMark, Inc.
The current share price for the stock is:
$43.13
Explanation:
a) Data and Calculations:
Dividend per share = $3.45
Growth rate = 5%
Investors' required rate of return = 13%
Stock value = Dividend per share / (Required Rate of Return – Dividend Growth Rate)
= $3.45/(0.13 - 0.05)
= $43.13
b) We can calculate BenchMark's current share price, by dividing the dividend per share by the investors' required rate of return after subtracting the growth rate from the required rate of return.
An Artificial Monopoly is a very huge firm wherein the production efficiency has no advantage over smaller firms but thrives all competitors out of business, remaining the sole producer of the industry.
Answer:
I believe the answer is B. 30 percent
<em>good luck, i hope this helps :)</em>
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Answer:
Operating cash flows
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV is a capital budgeting method used to determine profitable investments
