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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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Ari is currently consuming 10 hot dogs and 8 hamburgers per week. The last hot dog she consumed yielded 20 utils while the last
katen-ka-za [31]

Answer:

Yes, there is no need to change the eatings habits

Explanation:

Ari will maximize utility until

MU / P for both is equal in order to be at equilibrium

So, in this case,

For Hot dogs

= MU / P

where

MU is marginal utils, which is 20

P is Price, which is $2

So,

= 20 / $2

= 10

For Hamburgers

= MU / P

where

MU is marginal utils, which is 25

P is Price, which is $2.5

So,

= 25 / $2.5

= 10

Therefore, MU / P for hot dog = MU / P for Hamburger

Hence, there is not need to change the eatings habits.

6 0
2 years ago
In a command economy, Individuals fellow thir self-interest without government intervention True or False İf false, correct the
Ostrovityanka [42]

Answer:

False

Explanation:

In a command or planned economy, the factors of production are owned and controlled by the government.  The government makes all the significant economic decisions such as production, distribution, and pricing.  

The government prepares a central plan for the entire economy. The plan determines the production level, the goods and services to be produced, and their prices.  The central government employs all workers. The private sector does not exist.

8 0
2 years ago
You win a lottery with a prize of $1.5 million. Unfortunately the prize is paid in 10 equal annual installments. The first payme
EastWind [94]

The prize is really worth $1,006,512.21.

<h3>What is present value?</h3>

Present value is the sum of cash flows discounted at the rate of interest or the discount rate.  The annual cash flows for the next 10 years = $1.5 million / 10 = 150,000

The present value can be determined using a financial calculator

Cash flow from year 1 to 10 = $150,000

Discount rate = 8%

Present value = $1,006,512.21

Here is the complete question: You win a lottery with a prize of $1.5 million. Unfortunately the prize is paid in 10 an¬nual installments. The first payment is next year. How much is the prize really worth? The discount rate is 8 percent.

To learn more about present value, please check: brainly.com/question/25748668

3 0
2 years ago
When recording inflow and outflow of cash flow statements it is important to
Nastasia [14]

Answer: Cash inflows include the transfer of funds to a company from another party as a result of core operations, investments or financing. Such cash inflows include payments to the company by customers and banks and the contribution of equity by investors who purchase the company’s stock or partial ownership in a company.

Cash outflows include the transfer of funds by a company to another party. Such cash outflows include payments to business partners including employees, suppliers or creditors. Cash outflows also occur when long-term assets are acquired, investments are purchased, or settlements and expenses are paid.

7 0
2 years ago
Eastland’s government has a total national debt of $500 million, which is financed as follows: $100 million is held by other gov
luda_lava [24]

Answer:

The public debt owed by Eastland is $400 million

Explanation:

In this question, we are asked to calculate the amount of public debt in Eastland.

Public debt refers to the amount of money owed by a country to external borrowers.

It doesn’t include such debt that the country owes itself. For example, debts owed by one agency of government to another.

Hence to calculate the public debt of Eastland, we add the amount of debts owed by citizens of Eastland + Amount of debts owed by foreign citizens in Eastland .

Amount of debt owed by citizens of Eastland is $200 million while the amount of debt owed by foreign citizens is also $200 million.

Mathematically the public debt will be ; $200 million + $200 million = $400 million

4 0
2 years ago
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