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postnew [5]
3 years ago
15

A firm does not expect to pay dividends in the next four years. beginning five years from today, the firm expects to pay a const

ant dividend of $4.75 per year forever. investors required rate of return on the firm's stock is 10 percent. what is the price of the stock today?
Business
2 answers:
liraira [26]3 years ago
7 0
Given:
dividend: 4.75 per year forever
required rate of return: 10%

<span>Since the dividend is always the same, the stock can be viewed as an ordinary perpetuity with a cash flow equal to D every period. The per-share value is thus given by
</span>
P₀ = D/R

P₀ = Price today
D = dividend per year
R = required rate of return

P₀ = 4.75 / 0.10 = 47.50

The price of the stock today is $47.50

abruzzese [7]3 years ago
4 0
From the data given above, the investor required rate of return on the firm's stock is 10% and is equal to $4,75 that is expected to be paid each year.
If $4.75 = 10%, then the price of the stock which is 100% will be equal to $4,75 * 10= $47.50.
Therefore, the current price of the stock is $47.50.
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Answer:

Explanation:

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7 0
2 years ago
MacKenzie Company sold $640 of merchandise to a customer who used a Regional Bank credit card. Regional Bank deducts a 5.5% serv
Ne4ueva [31]

Answer and Explanation:

The Journal entry is shown below:-

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6 0
3 years ago
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The variance is the  difference between the total actual cost incurred and the total standard cost.

<h3>What is variance in accounting?</h3>

In the field of accounting, the variance is simply referred to as the difference that exists between the forecasted amount and the actual amount.

Therefore from the definition that we have above the answer to this question is variance.

Read more on variance here: brainly.com/question/15858152

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3 0
2 years ago
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N76 [4]

 The ethnocentric staffing policy is used in Trisha firm.

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What is importance of staffing?

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The ethnocentric approach--------- to recruitment means that we hire people from our parent country to fill positions all over the world.

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brainly.com/question/17084899

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6 0
2 years ago
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