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damaskus [11]
3 years ago
9

You are considering acquiring a common share of Sahali Shopping Center Corporation that you would like to hold for 1 year. You e

xpect to receive both $1.25 in dividends and $35 from the sale of the share at the end of the year. The maximum price you would pay for a share today is _______ if you wanted to earn a 13% return. A) $32.08 B) $41.67 C) $31.54 D) $30.97
Business
2 answers:
Lelechka [254]3 years ago
7 0

Answer:

A. $32.08

Explanation:

Dividend=$1.25

Capital gain after one year=$35

Rate of return=13%

Formula for this will be;

Share price=(dividend+capital gain)/(1+rate of return)

Share price=(1.25+35)/(1+.13)

Share Price=36.25/1.13

Share price=32.08

VashaNatasha [74]3 years ago
4 0

Answer:

A) $32.08

Explanation:

to determine the maximum amount that we are willing to pay for the stock we can use the present value formula:

present value = future value / (1 + r)ⁿ

  • future value = $1.25 + $35 = $36.25
  • r = 13%
  • n = 1

present value = $36.25 / (1 + 13%)¹ = $36.25 / 1.13 = $32.079 ≈ $32.08

The present value is useful for determining the value of money in time, since $1 today is worth more than $1 tomorrow. It can be solved to determine the future value, interest rate or number of periods.

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Answer:

Instructions are below.

Explanation:

Giving the following information:

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The government of country A has determined there is a coal shortage based on mining reports. As a result of these data, the gove
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The answer is: allocate resources.

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Answer:

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In which era of the marketing evolution did firms begin to focus on what consumers wanted and needed before designing, making, o
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The era of the marketing evolution  in which  firms begin to focus on what consumers wanted and needed before designing, making, or selling a product is market-oriented era.

<h3>What is the market-oriented era?</h3>

It  should be noted that around the year  1940s when industries realized that focusing only on their business needs  and as a result of this the customers are unsatisfied.

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