1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
makkiz [27]
3 years ago
15

Gilmore, Inc., just paid a dividend of $3.20 per share on its stock. The dividends are expected to grow at a constant rate of 6.

25 percent per year, indefinitely. Assume investors require a return of 12 percent on this stock. What is the current price?
Business
1 answer:
daser333 [38]3 years ago
7 0

Answer:

The current price is $55.65 as computed below.

Explanation:

The current price of the stock can be computed using the below formula:

Price=dividend/(rate of return-growth rate)

price=$3.20/(0.12-0.0625)

Price=$55.65

The stock of Jerome can be priced at $55.65 based on the fact that it offers return of 12% and the return is expected to grow at 6.25% in perpetuity.

This return shows that the actual return on shares is dividend dividend yield  as well as gains yield.Dividend is the return on the share based on dividends receivable from the share, while gains yield stem from share price appreciation

You might be interested in
Luthan Company uses a plantwide predetermined overhead rate of $22.20 per direct labor-hour. This predetermined rate was based o
nalin [4]

Answer:

The amount of manufacturing overhead cost that would have been applied to all jobs during the period is $279,720

Explanation:

The computation of the amount of manufacturing overhead is shown below:

= Predetermined overhead rate per direct labor-hour × total direct labor-hours

= $22.20 × 12,600 direct labors

= $279,720

Since the predetermined overhead rate is already given in the question, so there is no need to recalculate it and the other items which are mentioned are not relevant for the computation part. Hence, ignored it

6 0
3 years ago
Increases in the minimum wage are intended to raise the incomes of low-income workers. Many economists favor a different policy
Stels [109]

Answer:

The Earned Income credit

Explanation:

Many economists choose the earned income credit (EIC) over the increase in minimum wage because it avoids deadweight losses. Deadweight losses results when supply are demand are not in equilibrium (Market Inefficiency). Increases in minimum wages invariably leads to increase in prices of market goods which are overpriced. This leads to market Inefficiency.

So in trying to help low income earners, many economists choose the EIC over just increasing minimum wage.

The earned Income Credit helps certain tax payers with low incomes from work in a particular tax year. It reduces the amount of tax owed and may result in a refund to the tax payers if the amount of credit is greater than the amount of tax owed.

8 0
3 years ago
Why do businesses use letterheads and logos?
scoray [572]
The answer is A. Hope I could help.
5 0
3 years ago
A local clinic (institution) in need of more Purell antibacterial soap might purchase from Target, which is a ______ of soap, wh
oksano4ka [1.4K]

Answer:

The target is a re-seller

McGraw-Hill is a manufacturer

Explanation:

Purchasing Purell antibacterial soap from a target is re-seller, meaning the target is neither the producer nor the distributor of products but haven given name of such company like McGraw-Hill, one will know that McGraw-Hill is major publisher of books and their books are well local high school around the world. This makes the local high school that might bought from McGraw-Hill buying from a manufacturer

7 0
3 years ago
Which of these statements about pipeline inventory is best? A. Changing an item's lot size does not directly affect the average
Eddi Din [679]

Answer: Changing an item's lot size does not directly affect the average level of the pipeline inventory.

6 0
2 years ago
Other questions:
  • The goal of ________ research is to describe things, such as the market potential for a product or the demographics and attitude
    13·1 answer
  • Your friend hopes to expand her business to multiple locations. It would be best for her to create a1. limited liability company
    9·1 answer
  • The Hudson Corporation has 7,600 obsolete units of a product that are carried in inventory at a manufacturing cost of $152,000.
    15·1 answer
  • For external reporting purposes, U.S. GAAP allows companies to use
    15·1 answer
  • Sarah Wiggum would like to make a single investment and have ​$2.4 million at the time of her retirement in 40 years. She has fo
    6·1 answer
  • _______ decreases the number of dollars in the hands of the public and increases the number of bonds in the hands of the public.
    15·1 answer
  • Ouelette Corporation's relevant range of activity is 3,000 units to 7,000 units. When it produces and sells 5,000 units, its ave
    8·1 answer
  • List the steps of the segmenting and targeting process (put the first step on top). Instructions Choice 1 of 5. Select target ma
    12·1 answer
  • What stock should I buy
    9·1 answer
  • Vision statements, mission statements, values statements and identifying statements aren’t always developed by PR practitioner
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!