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JulijaS [17]
3 years ago
9

Maxwell Mining Company's ore reserves are being depleted, so its sales are falling. Also, because its pit is getting deeper each

year, its costs are rising. As a result, the company's earnings and dividends are declining at the constant rate of 5% per year. If D0 = $4 and rs = 13%, what is the value of Maxwell Mining's stock? Round your answer to the nearest cent.
Business
1 answer:
Nostrana [21]3 years ago
3 0

Answer:

$21.11

Explanation:

Given that,

Current dividend, D0 = $4

Rate of return, rs = 13%

P_{0}=\frac{D_{0}\times(1+g) }{rs-g) }

Here,

Current price of the stock = P_{0}

Growth rate, g = 5%

P_{0}=\frac{4\times(1+(-0.05)) }{0.13-(-0.05)) }

P_{0}=\frac{3.8}{0.18}

               = $21.11

Therefore, the value of stock is $21.11

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Answer:

$15,350

Explanation:

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4 years ago
What is an advantage of using credit cards? (Select the best answer.) Credit cards are protected from loss or theft. Credit card
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If a check correctly written and paid by the bank for $936 is incorrectly recorded in the company's books for $963, how should t
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The difference of $27 will be added in the bank reconciliation statement.

Explanation:

With regards to the above information,

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