Answer:
The price of the stock today is $54.61
Explanation:
The stock of this company pays a constant dividend for a defined period of time after equal intervals. Thus, it is just like an annuity. To calculate the price of such a stock, we will use the present value of annuity formula:
Assuming that the dividend is paid at the end of the period.
Present Value of Annuity = Dividend * [(1 - (1+r)^-n) / r]
Where,
- r is the required rate of return
- n is the number of years of annuity
The price of the stock today is,
P0 = 8.45 * [(1 - (1+0.13)^-15) / 0.13]
P0 = $54.607 rounded off to $54.61
False. It does not reduce market risk.
The Earned Income Credit is one alternative to PRICE controls
'Micro is the study of individuals and business decisions while macroeconomics while macro studies the decisions of the governments and countries.'
Microeconomics examines individual markets while macroeconomics examines the economy.
Lowering the discount rate can promote full employment because <span>companies are more likely to expand and hire more workers. High inflation is the circumstance which usually accompanies a period of economic expansion. </span>