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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.

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Barbara Hastings has no children of her own, but she does have a beloved niece named Ellen Laughridge. Attentive to the future f
timurjin [86]

Answer:

1. Ellen would only be able to recover the $500,000 insurance proceed if she should be able to find a technicality in the insurance company's rules and regulation. <em>This is because, strictly following the rules, there is nothing she can do regarding to the claim.</em>

<em />

2. It is not ethical for the insurance company to deny the claim of Ellen on the basis of technicality but when viewed from another perspective, they are strictly following the rules of the insurance organization and applying it to the later.<em> It is now left for the claimant to find another technicality on why he or she must be paid the insurance claim.</em>

Explanation:

7 0
3 years ago
What information does a supply schedule provide?
lesya [120]

Answer:

See below

Explanation:

A supply schedule shows the quantities that suppliers are willing to sell in the market at different prices. It is a table format with quantity on one column and prices on another. As per the law of supply, high prices lead suppliers to supply more at the market.

The supply schedule illustrates in a table format the relations between the price and the quantity supplied. It will show how the quantity increase as prices increases. The supply schedule is a tabular representation of the supply curve.

7 0
3 years ago
Are cities around the world doing a disservice to their citizens or their visitors, or both, by banning uber outright from opera
Ne4ueva [31]

Answer:

In my opinion they can be a big problem because if you can not use the uber in some community it's useless but they are banning ubers because the taxis business are loosing money and the uber is replacing the taxi business.

There is an own opinion question, so try to answer by yourself

4 0
3 years ago
The brenda one is the question thank youuu:)
Ivenika [448]

Answer:

C. y = 11000(1.086)^7

Explanation:

Given the following data;

Principal = $11,000

Interest rate = 8.6% = 8.6/100 = 0.086

Time = 7 years

To derive a mathematical expression, we would use the compound interest formula;

A = P(1 + \frac{r}{100})^{t}

Where;

A is the future value.

P is the principal or starting amount.

r is annual interest rate.

t is the number of years for the compound interest.

Substituting into the formula, we have;

A = 11000*(1 + \frac{8.6}{100})^{7

A = 11000*(1 + 0.086)^{7

A = 11000*(1.086)^{7

A = 11000*1.78

A = $19,580

7 0
3 years ago
The risk-free rate is 6% and the expected rate of return on the market portfolio is 13%. a. Calculate the required rate of retur
Andreyy89

Answer:

a. 14.75%

b. Under priced

Explanation:

The computation for the required rate of return is shown below:

a. Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

= 6% + 1.25 × (13% - 6%)

= 6% + 1.25 × 7%

= 6% + 8.75%

= 14.75%

b. As the required rate of return comes 14.75% and the required return is 16% so it is under priced as expected return is more than the required return

3 0
3 years ago
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