1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
7nadin3 [17]
3 years ago
5

Suppose you know a company's stock currently sells for $80 per share and the required return on the stock is 14 percent. You als

o know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield. If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share?
Business
1 answer:
nataly862011 [7]3 years ago
8 0

Answer:

The current dividend is $5.23 per share

Explanation:

This return is divided equally between dividend yield and capital gains yield, in other words 7%each (14%/2)

Expected return=current dividend*(1+growth rate)/share price +growth rate

note the growth rate also represents capital gains yield

0.14=CD*(1+0.07)/80+0.07

0.14-0.07=CD*(1.07)/80

0.07*80=CD*1.07

5.6=CD*1.07

CD=5.6/1.07

CD=$5.23

Ultimately the current dividend is $5,23 per share a shown by solving the equation for current dividend above

You might be interested in
What is an apprenticeship?
san4es73 [151]
B. Formal training that combines classroom instruction with learning on the job.

That's how I've understood it when I took business in high school.
7 0
3 years ago
Read 2 more answers
Isabella needs to create a mini-presentation with her group for an advertising campaign project in her marketing class. What typ
Eva8 [605]

Answer: Social learning

Explanation:

Isabella is involved in social learning with her learning group, in preparation for her mini-presentation on an advertisement campaign.

Social learning involves a form of learning done in groups where ideas are exchanged and learning is enhanced.

5 0
3 years ago
Evie is very good with computers and using social media. She has created a new email system that automatically generates the ema
agasfer [191]

Explanation:

Evie is more likely to be involved in e-marketing career pathway

3 0
3 years ago
Read 2 more answers
On January​ 1, 2017, the Accounts Receivable of Martha Company had a debit balance of​ $190,000. During​ January, the company pr
kupik [55]

Answer:

End of January​, 2017    

Dr Accounts Receivable  $350,000  

Explanation:

  • On January​ 1, 2017  

Dr Accounts Receivable $190,000  

  • During​ January  

Dr Accounts Receivable $400,000  

Cr Sales                           $400,000  

  • During​ January  

Dr Cash                            $240,000  

Cr Accounts Receivable $240,000  

  • End of January​, 2017  

Dr Accounts Receivable    $350,000  

3 0
3 years ago
Exercise 8-3 (Algo) Lump-sum purchase of plant assets LO C1 Rodriguez Company pays $389,610 for real estate with land, land impr
polet [3.4K]

Answer:

1.  Land  $175,324.50

   Land improvements $38,961

   Building  $175,324.50

2. Dr Land   $175,324.50

   Cr Cash   $175,324.50

   Being entries to recognize cost incurred in the purchase of Land

   Dr Land improvements   $38,961

   Cr Cash   $38,961

   Being entries to recognize cost incurred in the purchase of Land improvements

   Dr Building   $175,324.50

   Cr Cash   $175,324.50

   Being entries to recognize cost incurred in the purchase of Building

Explanation:

Using the appraisal method to apportion the cost of an asset to the components of the asset involves the consideration of the appraised cost of each individual item as a portion of the total cost of the asset.

Thus, given that  Rodriguez Company pays $389,610 for real estate with land, land improvements, and a building

Appraised cost of

Land = $247,500

Land improvements = $55,000

Building = $247,500

Total appraised cost of the asset = $247,500 +$55,000 + $247,500

= $550,000

Allocated cost of;

Land = $247,500/$550,000 * $389,610

= $175,324.50

Land improvements = $55,000/$550,000 * $389,610

= $38,961.00

Building = $247,500/$550,000 * $389,610

= $175,324.50

Journal entries

Dr Land   $175,324.50

Cr Cash   $175,324.50

Being entries to recognize cost incurred in the purchase of Land

For journal entries, we debit each of the individual assets account and credit cash to recognize the cost incurred in the purchase of the asset.

5 0
2 years ago
Other questions:
  • Central Perk orders their organic coffee filters from a South American supplier that mails them as inexpensively (hence, as slow
    11·1 answer
  • Blank (deleted) nothing to answer...
    10·1 answer
  • Which statement best summarizes the role of businesses in the flow of
    12·2 answers
  • Haley is a corporate certified public accountant (CPA) working on a new budget. When she lists the company’s liabilities, which
    7·1 answer
  • The concept of market efficiency underpins almost all financial theory and decision models. When financial markets are efficient
    9·1 answer
  • A railwya has an operating ratio of 78%. If uts operating revenue were for $ 4.6 B for 205what were its operating expenses
    13·1 answer
  • 25 points
    15·1 answer
  • As an investor, what is the risk involved when investing in companies on the stock
    6·1 answer
  • A producer has indicated to a potential client that the proposed life insurance policy is covered by the Massachusetts Life and
    14·1 answer
  • Total transaction costs, based on the assumptions provided, are expected to be:
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!