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
Savatey [412]
3 years ago
15

Global Exporters recently announced that it will pay annual dividends of $1.10; $1.25, and $1.30 a share over the next three yea

rs, respectively. After that, the firm plans to increase its dividend by 2.5 percent annually. What is one share of this stock worth to you today if you require an 11 percent rate of return?

Business
2 answers:
Whitepunk [10]3 years ago
4 0

Answer:

$13.28

Explanation:

Worth of the stock is the present value of all the cash flows associated with the stock. Dividend is the only cash flow that a stock holder receives against its investment in the stocks. We need to calculate the present values of all the dividend payments.

Formula for PV of dividend

PV of Dividend = Dividend x ( 1 + r )^-n

1st year

PV of Dividend = $1.10 x ( 1 + 11% )^-1 = $0.99

2nd year

PV of Dividend = $1.25 x ( 1 + 11% )^-2 = $1.01

3rd year

PV of Dividend = $1.30 x ( 1 + 11% )^-3 = $0.95

After three years the dividend will grow at a constant rate of 2.5%, so we will use the following formula to calculate the present value

PV of Dividend = [ $1.30 x ( 1 + 2.5% ) / ( 11% - 2.5% ) ] x [ ( 1 + 11% )^-4 ]

PV of Dividend = $10.33

Value of Stock = $0.99 + $1.01 + $0.95 + $10.33 = $13.28

Paraphin [41]3 years ago
3 0

Answer:

$14.42

Explanation:

Please kindly check attachment for the step by step solution of the given problem.

You might be interested in
Analyze the graph.
zvonat [6]
The answers to the question above are "increasing places to park bikes, increasing bike-share opportunities, and increasing high-occupancy vehicle lanes" which are the changes that city planners should consider within the city. The graph shows an increase of bicyclist. The graph also shows an increase in the high-occupancy car number. Thus, every plan has to be related to this condition. 
7 0
3 years ago
Read 2 more answers
A day care program frequently has a few parents picking up their children late. In an attempt to curb this, the daycare decides
alexandr1967 [171]

Answer:

4) All of the above

Explanation:

The day care program should have rewardedbeing on time to encourage this attitude.

Instead they put a price on being late. As parent considers this price cheap they arrive later to have some extra time beofre picking their childrens

Either the day care program reconsiders the fine policy and moves into a better program to estimulate being on time or it increases the "price" so is more expensive for the parents to come in time rather than paiying their fines.

5 0
4 years ago
Read 2 more answers
There is a way for you to become content, and that is first to become _______.
neonofarm [45]
Grateful There is a way for you to become content, and that is first to become “content”
3 0
3 years ago
Read 2 more answers
Which information is found on a credit report?
Makovka662 [10]

Answer:

D: Credit account history

Explanation:

got it right on edgenuity

8 0
3 years ago
What is the answer in effects in accounting equation?
Ann [662]

Answer:

No effect

Explanation:

The journal entry to record this give transaction is shown below:

Furniture Dr RM13,000

       To Bank RM 13,000

(Being the furniture purchased by cheque is recorded)

For recording this we debited the furniture as it increased the asset and credited the bank as it decreased the assets

Therefore there is no effect in the accounting equation as the increase and decreased in done in asset side only

5 0
4 years ago
Other questions:
  • You ran a little short on your spring break vacation, so you put $1,000 on your credit card. you can only afford to make the min
    7·1 answer
  • Jonas is in charge of designing a promotion campaign for NetJets, a private jet service company that has a high level of service
    15·1 answer
  • The average price of milk increased from $3.00 last year to $3.50 this year. This is most likely due to:
    12·2 answers
  • The debt-to-asset ratio is classified under _____ ratios.
    8·1 answer
  • Holders of common stock receive certain benefits, such as a residual claim, which is the
    10·1 answer
  • Boyd Corp. issued $1,500,000 of 9% nonconvertible bonds at 107, due in 10 years. Each $1,000 bond was issued with 45 detachable
    10·1 answer
  • Which word could describe a flu epidemic so serious that it has killed several elderly people​
    9·2 answers
  • ​In the _____ of the process of supplier segmentation, suppliers have a significant portion of the buyer’s spend but do not view
    9·1 answer
  • Coworkers Mindy and Jerome agree that Mindy will drive them to work every weekday for one month, and then Jerome will drive them
    11·1 answer
  • External failure activities A. seek to prevent defects in the products or services being produced. B inspect inputs and attribut
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!