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Nesterboy [21]
3 years ago
13

Transportation stocks currently provide an expected rate of return of 15%. TTT, a large transportation company, will pay a year-

end dividend of $3 per share. If the stock is selling at $60 per share, what must be the market's expectation of the constant-growth rate of TTT dividends?
Business
1 answer:
steposvetlana [31]3 years ago
6 0

Answer:

The answer is: 10% constant growth rate

Explanation:

Since transportation stocks provide a 15% rate of return, TTT stock should also provide the same rate of return. We can expect to earn $9 (= $60 x 5%) every year from our investment in TTT stocks. We are receiving $3 as dividends, so the constant growth rate should equal the difference between the expected return minus the dividend payments:

  • $9 - $3 = $6; $6 represents 10% of the current stock price

We can also calculate this with the following formula:

expected return rate = (dividends / price) + growth rate

15% = (3 / 60) + g

15% = 5% + g

10% = g

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kakasveta [241]

An example of a company connecting with customers in its package redesign strategy is creating a resealable package in response to consumer habits.

<h3>What is a redesign strategy?</h3>

A redesign strategy outlines which best practices should be employed first and which should be avoided in order to achieve the goals of the redesign endeavor.

Steps to a successful redesign of business processes:

  • Set precise objectives.
  • Prioritize each business process after identifying it.
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  • A single workflow.
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  • Single-source information collection.

In order to build the most effective product, the design strategy applies the tactical thinking of a company strategy to the needs of the user. Through innovative applications geared toward the end user, the convergence of business strategy and design thinking accomplishes long-term objectives.

To know more about design strategy refer to: brainly.com/question/14506200

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5 0
1 year ago
Asarta Inc. is polluting into a nearby fishing stream; doing so benefits them $40,000 a year. The fishermen are unhappy as their
IceJOKER [234]

Answer:

a. Asarta Inc. could pay the fishermen $8,500 and keep polluting  

Explanation:

The fishermen sell the fish for $8,000 a year at local market.

Due to pollution emitted by company into stream, their catch is dwindling and also their income.

The company benefits from usage of stream to the tune of $4,000 a year.  In such scenario, if company compensates the fishermen for any amount between $8,000 and $40,000 then, in that case, optimal solution to the problem can be achieved in absence of any other transaction cost as per the Coase Theorem.

Therefore, The Asarta Inc. could pay the fishermen $8,500 and keep polluting.

4 0
3 years ago
To compete in the automobile​ market, Tesla must make many strategic decisions such as whether to introduce a new car​ model, ho
bagirrra123 [75]

Answer:

Explained

Explanation:

At​ Tesla's Fremont, California​ plant, managers must decide on the monthly production quantities of their S and X models. In making this​ decision, the managers must face a trade-off, because producing more of one model means producing less of the other. So, there need to an optimum balance between production of model S and X and too will depend upon the demand in the market once, the variants are launched.

6 0
3 years ago
At year-end (December 31), Chan Company estimates its bad debts as 0.30% of its annual credit sales of $673,000. Chan records it
Rudiy27

Answer:

bad debt expense   2,019 debit

       allowance for uncollectible amount  2,019 credit

--to record estimated bad debt expense--

allowance for uncollectible amount 337 debit

                    accounts receivables               337 credit

--to record write-off of P.Park  Account--

accounts receivables               337 debit

       allowance for uncollectible amount 337 credit

--to reverse write-off of P-Park account--

cash                                         337 debit

       accounts receivables               337 credit

--to record collection of P-Park account--

Explanation:

<em>bad debt expense</em> 673,000 x 0.30% = <em>2,019‬</em>

<em />

The write off decreases both, the allowance and accounts receivables

As Park pay up his old debt, the entry is reversed. Then we record the collection as normal.

6 0
2 years ago
Use a well labelled graph to explain why the introduction of maximum prices in the petrol industry will not be an ideal decision
-Dominant- [34]

A country's economy will go on a decline if there is a hyperinflation in the petrol prices.

<h3>What is hyperinflation?</h3>

Extreme increase in prices in a very short span of time is regarded as the condition of hyperinflation. If there is hyperinflation in the petrol prices, its demand will be lowered and people will look for substitutes.

Thus, increase or hyperinflation in the petrol prices will lead to declining of a country's economy and will not serve as a wise decision.

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5 0
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