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spin [16.1K]
3 years ago
9

Burkhardt Corp. pays a constant $13.60 dividend on its stock. The company will maintain this dividend for the next 9 years and w

ill then cease paying dividends forever. If the required return on this stock is 12 percent, what is the current share price?
Business
1 answer:
zalisa [80]3 years ago
4 0

Answer:

current share price = $72.464197

Explanation:

given data

dividend = $13.60

time = 9 year

required return = 12 percent

solution

we get here current share price that is express as

current share price = dividend × \frac{1-(1+r)^{-t}}{r}    ..................1

put here value and we get current share price

current share price = $13.60 × \frac{1-(1+0.12)^{-9}}{0.12}  

current share price = $72.464197

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Explanation:

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3 years ago
Suppose your employer offers you a choice between a $ 4 comma 600 bonus and 200 shares of the company stock. Whichever one you c
Virty [35]

Answer:

a. Suppose that if you receive the stock​ bonus, you are free to trade it. Which form of the bonus should you​ choose? What is its​ value?

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Only if something catastrophic happened to the company would make the cash bonus more attractive.

6 0
3 years ago
Mr. Hudson notes that if he produces 10 pairs of shoes per day, his average fixed cost (AFC) is $14 and his marginal cost is $8;
zalisa [80]

Answer:

Average fixed cost for 20 units = $7

Explanation:

<em>The fixed costs are cost are expenditures that do not vary with the activity level within a given range. Unlike variable costs, fixed costs are tend to be unaffected in the short run by amount of production work done or service rendered.</em>

The units produced will not have an impact on the total fixed costs but rather on the average fixed cost. The average fixed cost would become lower as the units produced increases.

Average fixed cost = Total fixed cost / Total units produced.

Hence , Total fixed cost = Average fixed cost × units produced

DATA

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Units - 10 units

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Average fixed cost for 20 units = $7

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