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jenyasd209 [6]
3 years ago
7

Grateful Eight Co. is expected to maintain a constant 4.6 percent growth rate in its dividends indefinitely. If the company has

a dividend yield of 6.4 percent, what is the required return on the company’s stock?
Business
1 answer:
ad-work [718]3 years ago
7 0

Answer:

11%

Explanation:

To address this exercise, we need to recall the formula for dividend discounted model (DDM). The DDM is stated as below:

Stock intrinsic value = Next year dividend/(Required rate of return - Long term growth)

Rearrange a bit this formula, we have:

Next year dividend/Stock intrinsic value = Required rate of return - Long term growth, or

Dividend yield = Required rate of return - Long term growth

Putting all the number together, we have:

6.4% = Required rate of return - 4.6% or Required rate of return = 11%

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A seller (or provider) of goods or services to a business organization, usually a manufacturer or wholesaler, is known as a:
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3 years ago
What is the term used to describe product attributes that attract certain customers and can be used to form the competitive posi
Nikitich [7]

Answer:

What is the term used to describe product attributes that attract certain customers and can be used to form the competitive position of a firm?

Competitive dimensions.

Explanation:

In the business world, there are companies that sell products that are used for the same things. The companies in this types of environments are in competition with each other since they are all fighting over the same resource which is market share. A bigger market share usually translates to more customers and more sales. Bigger sales reflects to a bigger profit margin. For a company to have a bigger market share, there are a number of things that they can do to form the competitive position of their firm. They can do this by using product attributes that attract certain customers, a situation termed competitive dimensions.

The following competitive dimensions can be considered, namely;

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2. Time: the following form the major components of time, namely; delivery time, manufacturing lead-time and frequency of delivery.

3. Price and cost: these include selling price and the service costs.

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3 years ago
Credit card companies charge<br> on any purchases you have not paid off that month.
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7 0
2 years ago
Read 2 more answers
Jan. 1. Announced a 4-for-1 common stock split, reducing the par value of the common stock to $1.00 per share. Mar. 30. Converte
Crank

Answer:

a.                            stockholder's Equity

DEBIT                          amount                                 CREDIT           amount

                                                             1 Jan                                    600000

                                                               bank                                   160000

                                                              bond                                    103000

                                                              bank                                     110000  balance c/d               <u>973000</u>                                                        

                                       bank                                                                                                              

stockholder's           160000

stockholder's           110000           balance c/d                                270000

                                        preferred stock                        

                                                     1 Jan                                            500000

                                                      equipment                                  40000

balance c/d               540000

                                          investment

bank                             210000           bank                                    11500

paid in excess             1000

                                              EQUIPMENT                                                                        

preferred stock              40000           balance c/d                            40000

                                       Retained earnings              

                                                       1 Jan                                              325000

 balance c/d             475000        net income                                    150000

                                      bond

DEBIT                        amount                                    CREDIT             amount

common stock          103000

                                          paid in excess

balance  c/d          1000                   investment                             1000

b. Journal entries  

split shares no entry needed just a memo note

mar 30 Debit bonds 103000 credit stockholder's equity 103000

june 1 Debit equipment 40000 credit preferred stock 40000

Sep 1 Investment 210000 credit bank 210000

Nov 21 bank 110000 credit stockholder's equity 110000

Debit bank 11500 credit investment 10500,  credit paid in excess 1000

Debit  net income ( income summary) 150000 credit Retained earnings 150000

Explanation:

the missing parts of the question;

The stockholders’ equity of Summit Corporation at January 1 follows:

7 Percent preferred stock, $100 par value, 20,000 shares authorized;

5,000 shares issued and outstanding $500,000

Common stock, $15 par value, 100,000 shares authorized;

40,000 shares issued and outstanding 600,000

Paid-in capital in excess of par value—Preferred stock 24,000

Paid-in capital in excess of par value—Common stock 360,000

Retained earnings 325,000

Total Stockholders’ Equity $1,809,000

The following transactions, among others, occurred during the year:

Jan. 12 Announced a 4-for-1 common stock split, reducing the par value of the common stock to $3.75 per share. The authorization was increased to 400,000 shares.

Mar. 31 Converted $40,000 face value of convertible bonds payable (the book value of the bonds was $43,000) to common stock. Each $1,000 bond converted to 125 shares of common stock.

June 1 Acquired equipment with a fair market value of $70,000 in exchange for 500 shares of preferred stock.

Sept. 1 Acquired 10,000 shares of common stock for cash at $10 per share.

Oct. 12 Sold 1,500 treasury shares at $12 per share.

Nov. 21 Issued 5,000 shares of common stock at $11 cash per share.

Dec. 28 Sold 1,200 treasury shares at $9 per share.

31 Closed net income of $95,000 to the Retained Earnings account.

3 0
3 years ago
1. Working with Numbers and Graphs Q1 Last year, Raphael bought a bond for $10,000 that promises to pay him $900 per year. This
Scilla [17]

Answer:

$9,000

Explanation:

Last year, Raphael bought a bond for $10,000 that promises to pay him $900 per year

Interest rate = $900/$1000 * 100 = 9%

This year, he can buy a bond for $10,000 that promises to pay $1,000 per year.

Interest rate = 1,000/10000 * 100 = 10%

If Raphael wants to sell his old bond, he has to lower its price in order to compensate for rise in interest rate. The bond, which he would sell, should pay 10% interest PA

=>> 900/10% * 100 = $9,000

So, the bond price is likely to be $9,000

3 0
2 years ago
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