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Nana76 [90]
3 years ago
14

CDB stock is currently priced at $80. The company will pay a dividend of $4.57 next year and investors require a return of 10.8

percent on similar stocks. What is the dividend growth rate on this stock
Business
1 answer:
Stels [109]3 years ago
3 0

Answer:

The answer is 5.09%

Explanation:

The model used in this question is the Dividend Discount Model and it is one of the methods used in determining the price of stock. Here, the price of stock had already been determined. We are looking for one of the variables (growth rate) used in determining the price.

The formula for determining price of stock is:

Po = D1/r - g

Where Po is the price of stock

D1 is the dividend for next year

r is the rate of return

g is the dividend growth rate

$80 = $4.57/0.108 - g

Cross multiply:

8.64 - 80g = 4.57

80g = 8.64 - 4.57

80g = 4.07

g = 4.07/80

g =0.05088

g = 5.09%

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Delta Lighting has 30,000 shares of common stock outstanding at a market price of $15 a share. This stock was originally issued
pochemuha

Answer:

the weighted average cost of capital is 11.57 % .

Explanation:

Market Value of Equity = Number of Common Shares Outstanding × Market Price per share

                                      = 30,000 shares × $15

                                      = $450,000

Market Value of Debt = Face Value × 82%

                                    = $280,000 × 82%

                                    = $229,600

WACC = Ke × (E/V) + Kd × (E/V)

           = 14.00 % × ($450,000/ $679,600) + 6.80 %  × ($229,600/ $679,600)

           = 9.27 % + 2.30 %

           = 11.57 %

3 0
3 years ago
ABC Corporation reports the following information:
Tpy6a [65]

Answer:

$480,000

Explanation:

Data provided as per the question below:-

Net income = $380,000

Depreciation = $70,000

Decrease in accounts receivable = $30,000

The computation of cash provided by operating activities is shown below:-

= Net income + Depreciation + Decrease in accounts receivable

= $380,000  + $70,000  + $30,000

= $480,000

Therefore we applied the above formula.

7 0
2 years ago
Which of the following is true about checks?
tankabanditka [31]

Incomplete question. Here's the remaining question;

A. It is a two-party instrument.

B. It necessitates that the seller has to be both the drawer and the payee.

C. It is always payable on demand.

D. It requires that the drawer is holding the drawee's money.

Answer:

C

Explanation:

Note that, to be always paid on demand implies that any time a request is made (demanded) to the bank will be fulfilled.

Therefore, an individual has a sense of security using checks to receive payments.

4 0
3 years ago
How much are you willing to pay for one share of LBM stock if the company just paid an annual dividend of $2.24, the dividends i
Licemer1 [7]

Answer:

$18.33

Explanation:

The company just paid an annual dividend of $2.24

The dividend increase by 2.3% annually

= 2.3/100

= 0.023

The required return is 14.8%

= 14.8/100

= 0.148

Therefore the price that will be paid for one share of LBM stock can be calculated as follows

= 2.24 × (1+0.023)/(0.148-0.023)

= 2.24 × 1.023/0.125

= 2.29153/0.125

= $18.33

Hence $18.33 will be paid for one share of LBM stock

7 0
3 years ago
ANSWER QUICKLY PLEASE: What do certifications show a potential employer? Answer in 3–4 sentences.
Nat2105 [25]

Answer: That you are qualified for the job role

Explanation:

Certifications allows an employees to show a current or future hiring manager that they possess the skill set and expertise needed for the job.

They help the employers hire the most competent and qualified personnel for the job as it shows you know your way around the job. And when that certification is now backed by real world on the job experience, this gives the hiring manager a sense of security.

3 0
3 years ago
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