Answer:
$11.98
Explanation:
A share of common stock just made a dividend payment of $1.00
The expected long-run growth rate of for this stock is 5.4%
= 5.4/100
= 0.054
The investors required rate of return is 14.2%
= 14.2/100
= 0.142
The first step is to calculate the dividend year 1(D1)
D1= Do(1+g)
= 1(1+0.054)
= 1×1.054
= $1.054
Therefore, the stock price can be calculated as follows
Po= D1/(rs-g)
= 1.054/(0.142-0.054)
= 1.054/0.088
= $11.98
Hence the Stock price is $11.98
A limit of spending of the government,
Gross pay is what employees earn before taxes, benefits and other payroll deductions are withheld from their wages. The amount remaining after all withholdings are accounted for is net pay or take-home pay.
The amount of the stock price that will be reflected in the PVGO is $10
The value of an organization's potential future growth is symbolized by the acronym PVGO, or "present value of growth opportunities." It represents the potential value for the organization by reinvesting its earnings back into the business.
Expected Dividend payment (D) = $2.50
Total Earnings (E) = $4
Rate of return (ROR) = 20%
Step 1. Using no growth rate (GR), computing the stock price (SP)
Since the growth rate is not specified, 0% is taken as the default value.
The stock price (SP) = E/ROR
= $4 / 20%
Stock price = $20.
Step 2. Computing the SP reflected in PVGO.
So, total SP with no GR
= $30 - $20
Stock price with no growth rate = $10
Hence, the $10 will be reflected in the PVGO
Learn more about PVGO:
brainly.com/question/28434542
#SPJ4
thanks, buddy... I appreciate it...:)
