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LUCKY_DIMON [66]
3 years ago
13

Michael's, Inc., just paid $2.20 to its shareholders as the annual dividend. Simultaneously, the company announced that future d

ividends will be increasing by 4.8 percent. If you require a rate of return of 9 percent, how much are you willing to pay today to purchase one share of the company's stock?
Business
1 answer:
Whitepunk [10]3 years ago
5 0

Answer:

The maximum price that should be paid for one share of the company today is $54.895

Explanation:

The price of a stock that pays a dividend that grows at a constant rate forever can be calculated using the constant growth model of Dividend discount model (DDM) approach. The DDM values a stock based on the present value of the expected future dividends. The formula for price today under this model is,

P0 = D1 / r - g

Where,

  • D1 is the expected dividend for the next period or D0 * (1+g)
  • r is the required rate of return
  • g is the growth rate in dividends

SO, the maximum that should be paid for this stock today is:

P0 = 2.2 * (1 + 0.048)  /  (0.09 - 0.048)

P0 = $54.895 rounded off to $54.90

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kakasveta [241]

Answer:

When quantity supplied decreases by 7 apartments at each rent, the new supply and demand schedule is given below:

Monthly rent    QD        QS

400                   30           9

450                    25           11

500                    20           13

550                    15            15

600                    10            17

So, the new equilibrium price is $550 and quantity is 15.

7 0
2 years ago
Why might a country choose to devalue its currency? to please its trading partners to encourage exports to encourage imports to
Hatshy [7]

The major reason a country might choose to devalue its currency is to encourage exports.

<h3>What do you mean by Devaluation?</h3>

Devaluation refers to the downward movement in the value of the country's currency. The government that issues the currency has the power to devalue its currency.

Devaluating the currency reduces the cost of a country's exports and reduces trade deficits. For encouraging exports, a country chooses to devalue the currency.

Therefore, B is the correct option.

Learn more about Devaluation here:

brainly.com/question/15293218

6 0
2 years ago
Read 2 more answers
Organizations often start a new marketing research study by first examining secondary data primarily because
34kurt

Answer:

using this information can result in time and cost savings

Explanation:

5 0
2 years ago
When does information become a liability for an organization?
jeyben [28]
A liability is a debt to an oraganization/business. Once the information brings the company down -holds them back- it becomes a liability. It's like if you have an accounts payable your creditors would have full rights to your money upon company liquidation. That means your company will earn less revenue. A liability is something you owe.
7 0
3 years ago
In competitive markets, which of the following is not correct? Group of answer choices No individual buyer can influence the mar
julia-pushkina [17]

Answer:

Some sellers can set prices

Explanation:

Characteristics of competitive firms:

1. All sellers are price takers. No seller can influence market price.

2. All buyers are price takers

3. Forces of demand and supply determine market price.

4. All products are homogenous

5. There are no barriers to entry or exist of firms

6. There is perfect information

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3 years ago
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