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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:

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lora16 [44]

Answer: hello your question has some missing information below is the missing information

Suppose the economy begins with output equal to its natural level. Then there is an increase in consumer confidence and households attempt to consume more for a given level of disposable income.

answer :

Attached below

Explanation:

IS-LM modeling curves intersects and it also defines the value of r and Y where r ( rate of interest )  Y( output level )

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