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Soloha48 [4]
3 years ago
6

How much are you willing to pay for one share of LBM stock if the company just paid an annual dividend of $2.24, the dividends i

ncrease by 2.3 percent annually, and you require a return of 14.8 percent?
A. $19.29
B. $17.59
C. $18.21
D. $18.33
E. $19.33
Business
1 answer:
Licemer1 [7]3 years ago
7 0

Answer:

$18.33

Explanation:

The company just paid an annual dividend of $2.24

The dividend increase by 2.3% annually

= 2.3/100

= 0.023

The required return is 14.8%

= 14.8/100

= 0.148

Therefore the price that will be paid for one share of LBM stock can be calculated as follows

= 2.24 × (1+0.023)/(0.148-0.023)

= 2.24 × 1.023/0.125

= 2.29153/0.125

= $18.33

Hence $18.33 will be paid for one share of LBM stock

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Answer:

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Explanation:

Calculation to determine the minimum guaranteed mileage should the manufacturer announce

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Explanation:

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Answer:

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Explanation:

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