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ANTONII [103]
3 years ago
6

"The next dividend payment by Savitz, Inc., will be $1.48 per share. The dividends are anticipated to maintain a growth rate of

5 percent forever. If the stock currently sells for $27 per share, what is the required return
Business
1 answer:
scoundrel [369]3 years ago
6 0

Answer:

The correct answer is 10.48%.

Explanation:

According to the scenario, the given data are as follows:

Current price = $27

Expected dividend = $1.48

Growth rate = 5%

So, we can calculate the required return by using following formula:

Required return = (Expected Dividend ÷ Current Price ) + Growth rate

By putting the value in the formula,we get

Required return = ( $1.48 ÷ $27 ) + 5%

= 0.05481 + 0.05

= 0.10481 or 10.48%

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DedPeter [7]

Answer:

C) common stockholders, but after that of bondholders.

Explanation:

Preferred stockholders hold a claim on assets that has priority over the claims of common stockholders but after that of bondholders.  

The preferred shareholder is given preference for the distribution of dividends, which is higher than the common stock. It is paid as per the discretion of the company´s directors. Instead, they have limited right and they do not vote for corporate governance like a common stockholder. In the case of the dissolution of the company, the preferred shareholders will still receive payment due to them in terms of dividends. They have a feature of both bonds and equity stockholders.

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3 years ago
Bond funds: a) Will lose all value if a single bond defaults b) Are investment bargains because their price is so low c) Are ris
Vsevolod [243]

Answer:

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Because bond fund is an aggregation of various types of bonds, the risk of the bond fund is lower than the risk of holding any corporate bonds. This is because risks are spread.

4 0
3 years ago
TL Company has expected earnings of $75 in one year if it does well and $25 if it does poorly. The firm has outstanding debt of
Juliette [100K]

Answer:$27.78

Explanation:

Expected value of debt after one year = (40* .60)+(15*.40)

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Current value of debt = Value at 1year / (1+r)^n

= 30/ (1+.08)^1

= 30 / 1.08

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3 0
3 years ago
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serg [7]

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Dahasolnce [82]
20was 40times. 23was 60times
5 0
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