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Mars2501 [29]
3 years ago
7

Priscilla owns 500 shares of Deltona stock. It is January 1, 2016, and the company recently issued a statement that it will pay

a $1 per share dividend on December 31, 2016, a $2.50 per share dividend on December 31, 2017, and then cease all future dividends. Priscilla does not want any dividend income this year but does want as much dividend income as possible next year. Priscilla can earn 8.5 percent on her investments. Ignoring taxes, what will Priscilla's homemade dividend per share be in 2017
Business
1 answer:
kotykmax [81]3 years ago
7 0

Answer:

Priscilla's homemade dividend per share be in 2017 will be $3.585

Explanation:

In order to calculate what will be Priscilla's homemade dividend per share be in 2017 we would have to use the following formula:

homemade dividend=(Dividend in 2016×(1+Required rate))+Dividend in 2017

homemade dividend=($1×(1+8.5%))+$2.50

homemade dividend=$1.085+$2.50=$3.585

Priscilla's homemade dividend per share be in 2017 will be $3.585

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Any resource that a company, an organization, or an economic body owns or controls is considered an asset. It encompasses everything that has the potential to generate gains in the economy. When turned into money, assets indicate the worth of ownership.

<h3>What do you mean by solvent in accounting?</h3>

A company's capacity to fulfill its short-term and long-term financial commitments is known as its solvency. One indicator of a company's financial health is its level of solvency, which reveals whether it will be able to continue running its business into the near future. Ratio analysis is a tool investors can use to assess a company's solvency.

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2 years ago
For the Dividend Growth Model, the equation can be written as follows: P0 = =D1/(RE – g). How can this equation be rearranged?
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The second part(g) is known as the growth rate of dividends.

The initial formula is rearranged thus:

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