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
If convertible bonds were issued at a discount, when computing diluted EPS, the amortization of the bond discount: Multiple Choi
Brums [2.3K]

<u>Answer:</u> Option 1

<u>Explanation:</u>

If the convertible bonds are issued at discount then it will increase the numerator. Convertible bonds yields a fixed interest income. When the convertible bonds are issued at a discount then they can be converted into shares and discount is considered in the purchasing price of the stock.

In amortized bond the each payment goes towards the interest as well as the principle amount. Amortization reduces the credit risk as the principle is repaid on maturity or on default of the firm.

6 0
3 years ago
Carey is a waiter at a restaurant that pays a small hourly amount plus tips. Customers are not required to tip the waiter. Carey
Nina [5.8K]

Answer:

Yes, she is required to include her tips in gross income.

Explanation:

Yes, Carey is required to include her tips in gross income. She is required to include both her small hourly amount and her tips, declaring both as a total sum amount. Even though the customer has no obligation to pay any tip of any kind to Carey, any tip she receives will count as compensation for services, as the tips are payments for her service to the customer.  

4 0
3 years ago
________ refers to setting price based on buyers' perception of value rather than on the seller's cost.
melomori [17]

Answer:

Value based pricing

Explanation:

Value based pricing  is a pricing strategy that includes setting a price based on how much the customer believes the product  you’re selling is worth.

4 0
4 years ago
When a vendor credit is recorded by a Quick Books Online user, what are 2 ways to use the vendor credit?
labwork [276]

Answer:

Explanation:

These are the 2 ways to use provider credit:

1. Through linking reimbursement checks in bank deposit. These checks are from the vendor and will be used to create a vendor credit.

2. Making payment of supplier invoices, is another way to use credit, to carry out this, I have to create the invoice.

8 0
4 years ago
What are the advantages to shared decision-making
Dahasolnce [82]

Answer:. When patients participate in decision making and understand what they need to do, they are more likely to follow through.

Explanation:

4 0
3 years ago
Other questions:
  • A dishwasher uses 700 watts each time it is run. the cycle takes one hour. it is run 150 times per year. how much energy does it
    9·1 answer
  • Eliza took her car to her regular mechanic, who had a private business. The mechanic often advertised on billboards, writing "Re
    15·2 answers
  • Where did martha stewart work before she came an entrepreneur?
    11·1 answer
  • An october sales forecast projects 7,000 units are going to be sold at a price of $11.50 per unit. the desired ending inventory
    9·1 answer
  • Suppose that the market demand for 32-oz. wide mouth Nalgene bottles is Q = 50,000p^-1.076, where Q is the quantity of bottles p
    9·1 answer
  • A small factory produces toilet paper. The annual demand is 360,000 units, and the company produces toilet paper in batches. On
    9·1 answer
  • From 1973 to 1986, growth in the United States economy was over 33 percent, while the percent growth in United States energy con
    5·1 answer
  • Which of the following illustrates the law of demand? a. Jorge buys fewer pencils at $2 per pencil than at $1 per pencil, ceteri
    9·1 answer
  • In 2020, Sunland Corporation incurred research and development costs as follows: Materials and equipment $116000 Personnel 13600
    14·1 answer
  • Using the transportation method for solving the optimal shipping a product from factories to warehouses, as per text, you should
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!