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iren [92.7K]
2 years ago
11

Harbour View Company common stock has a $30 par value and is currently selling for $65. Industry analysts are predicting dividen

ds to grow at 7.5 percent per year for the foreseeable future. Recently, Harbour View paid a dividend of $1.70. What is the expected rate of return for the stock
Business
1 answer:
madam [21]2 years ago
4 0

Answer:

The expected rate of return on this stock is 10.31%

Explanation:

The constangt growth model of the DDM approach is used to calculate the price of a share based on the edxpected future dividends from a stock that are growing at a constant rate. The formula for price using constant growth model is,

P0 = D0 * (1+g) / (r - g)

Plugging in the values,

65 = 1.7 * (1+0.075) / (r - 0.075)

65 * (r - 0.075) = 1.8275

65r - 4.875 = 1.8275

65r = 1.8275 + 4.875

r= 6.7025 / 65

r = 10.31% or 0.1031

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benefit segmentation (behavioral segmentation) dividing the market into segments according to the different benefits that consumers seek from the product.

Explanation:

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2 years ago
The following information relates to last year's operations at the Legumes Division of Gervani Corporation: Minimum required rat
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Answer:

$18,250

Explanation:

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2 years ago
Which computer science professor has won an Oscar?<br> Gauss<br> Fedkiw<br> Pythagoras<br> Edison
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3 years ago
A company with 100,000 authorized shares of $7 par common stock issued 46,000 shares at $16. Subsequently, the company declared
liq [111]

Answer:

$27,600

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4 0
2 years ago
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Gemiola [76]

Answer:

B. Income Tax Expenses

Explanation:

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However, income tax expense is only calculated when the net profit has been ascertained. It is usally referred to as net income before tax. It is based on this figure, that the income tax expense is then calculated based on prevailing income tax percentage.

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