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Gnoma [55]
3 years ago
14

Here are data on two stocks, both of which have discount rates of 8%: Stock A Stock B Return on equity 8 % 5 % Earnings per shar

e $ 2.60 $ 1.80 Dividends per share $ 1.30 $ 1.30 a. What are the dividend payout ratios for each firm? (Enter your answers as a percent rounded to 2 decimal places.) b. What are the expected dividend growth rates for each stock? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) c. What is the proper stock price for each firm? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Business
1 answer:
AfilCa [17]3 years ago
6 0

Answer:

Please sew solution below

Explanation:

a. What are the dividend payout ratios for each firm

Dividend payout ratio = Dividend / EPS

• Payout ratio stock A = $1.30 / $2.6 = 0.5= 50%

• Payout ratio stock B = $1.3 / $1.8 = 0.72222 = 72.22%

b. What are the expected dividend growth rates for each stock.

Growth rate = ROE × (1 - dividend payout ratio)

•Growth rate stock A = 0.08 × (1 - 50%) = 0.04 = 4%

• Growth rate stock B = 0.05 × (1 - 72.22%) = 0.01389 = 1.39%

c. What is the proper stock price for each firm

• Stock A

Price = D1 / (Re - g)

D1= $1.30 * (1 + 0.04)

= 1.352

Stock B

Price = D1 / (Re - g)

D1= $1.30 * (1 + 0.013)

= 1.3169

Therefore,

• Stock A's proper price = $1.352 / (0.08 - 0.04) = $33.8

• Stock B's proper price = $1.3169 / ($0.08 - $0.013) = $19.66

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An investor invests $4,000 to buy 200 shares of Sand Corporation, which has an expected return of 24%; $2,000 to buy 100 shares
Anni [7]

Answer:

Expected return = 28%

Explanation:

given data

invests $4,000

share = 200

return = 24%

and

invests = $2000

share = 100

return = 18%

and

invest = $4,000

share = 400

return = 28%

to find out

expected return on this portfolio

solution

we know total investment is

Total investment = 4000+2000+4000

Total investment = 10000

and

Wt. of Sand Corporation shares in the total portfolio= \frac{4000}{10000} =  0.4

Wt. of Water Corporation shares in the total portfolio=\frac{2000}{10000} =  0.2

Wt. of Beach Corporation shares in the total portfolio=\frac{4000}{10000} =  0.4

and

Expected return on the given portfolio is

Expected return = 0.4 × 24% + 0.4 × 18% + 0.4 × 28%

Expected return = 28%

5 0
3 years ago
If i am medically retired from the military do i still receive va disability pay
yaroslaw [1]
If you have a VA service-connected disability rating of 10% or higher, you are eligible to receive a monthly compensation check from the VA. The monthly compensation payments vary by your disability rating—and if your rating is 30% or higher—the rates are increased, depending number of dependents you have filed on your claim.
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3 years ago
Refer to Exhibit 9.3, which shows the cost and revenue curves for a non-discriminating monopolist. The total cost incurred by th
Gnom [1K]

Answer: $19,800

Explanation;

The Monopolist will maximize output at the point where Marginal Revenue equals Marginal Cost because at this point all resources are being fully utilized.

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The Average Total Cost tallying with this is $18 per unit.

Total Cost = 18 * 1,100

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Answer:

The correct answer is A. In Ricci v. DeStefano, the Supreme Court ruled that an employer may not simply disregard a test based on unwanted results unless the test is shown to be biased or deficient.

Explanation:

Ricci v. DeStefano is a Supreme Court ruling of 2009, after a lawsuit by nineteen firefighters who claimed to have been discriminated against in terms of career development.  They denounced that they had been discriminated after having passed the admission tests and still had not been promoted, since no African-American candidate had passed the tests. They also denounced that they had not been promoted because the Fire Department did not want to promote a group of new recruits without including within it any member of racial minorities.

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