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vekshin1
3 years ago
5

Metroplex Corporation will pay a $5.20 per share dividend next year. The company pledges to increase its dividend by 7.20 percen

t per year indefinitely. If you require a 14.00 percent return on your investment, how much will you pay for the company's stock today
Business
1 answer:
Scilla [17]3 years ago
8 0

Answer:

The maximum amount that an onvestor would be willing to pay for the stock today is $76.47

Explanation:

The constant growth model of the dividend growth adn DDM aproach will be used to calcualte the value of the stock as its dividends will grow by a constant percentage forever.

The price of the stock today based on this model will be,

P0 = D1 / r - g

Where,

D1 is the dividend expected for next year

r is the required rate of return

g is the growth rate in  dividends

P0 = 5.2 / (0.14 - 0.072)

P0 = $76.47

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(Q, R) = (1555, 1400)

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Explanation:

Lot size-reorder point system is one of the multi period models. This system is denoted by decision variables (Q, R). This multi period model is implemented when there is uncertain demand in inventory control.

nevertheless, in the simple EOQ model, demand is known and fixed. But when the demand is random, these lot size-reorder point (Q, R) systems allow random demand.

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Additional steps are attached as files

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Malcolm has been researching reports generated by government agencies and the local chamber of commerce. What kind of research i
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Establishing the structure of a portfolio to meet specific financial goals is called:
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3 years ago
Sheridan, Inc., has net income of $15,300,000 on net sales of $450,000,000.The company has total assets of $125,000,000 and stoc
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(b) 0.3825

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