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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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The distinction between supply and the quantity supplied is best made by saying that___________.
snow_lady [41]

Answer:

b. supply is represented graphically by a curve and quantity supplied as a point on that curve. 

Explanation:

Qunatity supplied shows how qunatity of a product changes in response to changes in  price of that good. According to the law of supply, the higher the price of good, the higher the quantity supplied and the lower the price of a good, the lower the quantity supplied.  This shows that quantity supplied has a direct relationship with price.

Changes in quantity supplied is shown by movement along a supply curve.

Changes in supply is caused by other factors other than changes in price. Some of these factors are :

Changes in price of similar goods

Tax

Change in number  of suppliers

Technological advancement

Changes in supply is shown by movement of the supply curve either to the left or to the right and not a movement along the supply curve.

I hope my answer helps you

7 0
3 years ago
In deciding on a legal form of organization, you should ask yourself all of the following questions except______________
algol13

In deciding on a legal form of organization, you should ask yourself how many employees will you hire.

<h3>What is an organization?</h3>

An organization refers to an organized group of people with a particular purpose such as any business or government department.

When deciding on a legal form of organization, you should ask yourself all of the following questions except how many employees will you hire.

Therefore, C is the correct option.

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5 0
2 years ago
Jus de Fruit Co. has set up for automated production of its new bottled Triple Berry Colada. Six samples were taken during the f
Sauron [17]

The X bar chart will allow the team to monitor the central tendency of the process although the process will not be in control.

<h3>What is the X bar chart?</h3>

This refers to a Shewhart control chart that are used to monitor the arithmetic means of successive samples of constant size.

Hence, the X bar chart will allow the OM team to monitor the central tendency of the process although the process will not be in control.

Therefore, the Option B is correct.

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4 0
2 years ago
An organization whose duties include consolidating small loads of freight, negotiating shipping rates, and booking space on tran
Nuetrik [128]

Answer:

Freight Forwarder

Explanation:

The Freight Forwarder can be an individual person or a company which organizes the shipments for a person or company to get goods or products transferred from the manufacturer to the customer or the market i.e the final destination of distribution.

Forwarders involves with a carrier or with the number of carriers to transfer the goods.

6 0
3 years ago
Griffin goat far inc has sales of 666000, depreciation expense of 72000, interest expense of 46000, nad a tax rate of 24 percent
Helen [10]

In a condition where Griffin Goat Far Inc., has sales of 666000, depreciation expense of 72000, interest expense of 46000, and a tax rate of 24 percent, the net income of this firm will be $416,480.

<h3>What is the significance of net income?</h3>

The net income can be referred to or considered as the surplus difference between the gross income and the expenses plus taxes of an organization for a given period.

Using the given information, it can be interpreted that,

Net Income = 666,000 – (72,000 + 46,000) – 24%

Net Income = 666,000 – 118,000 – 24%

Net Income = 548,000 – 24%

Net Income = $416,480

Therefore, the significance regarding the net income has been aforementioned.

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6 0
1 year ago
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