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Dima020 [189]
2 years ago
10

2. Best Ever Toys just paid its annual dividend of $1.78 per share. The required return is10.6 percent and the dividend growth r

ate is 1.43 percent. What is the expected value of this stock five years from now
Business
1 answer:
Scorpion4ik [409]2 years ago
7 0

Answer:

Expected value of stock is $20.84

Explanation:

The dividend discount method (DDM) is used to calculate the stock value. The commonly used formula for the Gordon Growth version of the DDM which focused on dividends,

Price of Stock = D5 / (r - g)

where:

D5 = Dividends after five year from the now = D ( 1 + g )^5

r = Required rate of return

g = Growth rate of dividends

Price of Stock = D ( 1 + g )^5 / (r - g)

Price of Stock = $1.78 ( 1 + 1.43% )^5 / (10.6% - 1.43%)

Price of Stock = $1.91 / 9.17%

Price of Stock = $20.84

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3 years ago
A tenant occupying 20,000 square feet in your building has two years remaining on their lease. You have a good relationship with
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4 0
3 years ago
a local pizza parlor is selling two different shapes of cheese pizza for the same price. You can get two small square pizza that
Mamont248 [21]

Answer:

The large round pizza with a 14 inch diameter

Explanation:

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We can also think that most people don't like the crust of the pizza. Two pizzas have more crust than one. So one pizza, besides being bigger, can save you to eat the crust and more cheese and sauce.

5 0
3 years ago
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