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Bas_tet [7]
3 years ago
8

Two constant growth stocks are in equilibrium, have the same price, and have the same required rate of return. Which of the foll

owing statements is CORRECT?a. The two stocks must have the same dividend per share.b. If one stock has a higher dividend yield, it must also have a lower dividend growth rate.c. The two stocks must have the same dividend yield.d. The two stocks must have the same dividend growth rate.e. If one stock has a higher dividend yield, it must also have a higher dividend growth rate.
Business
1 answer:
Assoli18 [71]3 years ago
7 0

Answer:

B: If one stock has a higher dividend yield, it must also have a lower dividend growth rate

Explanation:

A constant growth stock is valued using the formula:

P0 = \frac{D1}{ke-g}

from this formula,  holding other things constant, a higher D1 value would decrease P0, whilst a lower g value would have an effect of lowering P0.

For the two stocks to be in equilibrium, since we are not specifically  told that the two stocks have the same growth rate [ the question simply says the growth rate is constant...meaning it is not expected to change], it thus follows that if one one stock has a higher dividend value ( which would  increase the price if all other variables are not changed), it must also have a lower dividend growth rate, which would have the opposing effect, thus keeping the two stocks in equilibrium.

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Answer:

2918.25

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on october 1, the beginning of the new term, Davis institite, a private school, recieves $168,500 in tuition for the upcoming se
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The correct answer is $126,375.

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8 0
3 years ago
Here are the comparative income statements of Ivanhoe Corporation. IVANHOE CORPORATION Comparative Income Statement For the Year
AlekseyPX

Answer:

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Net sales                    624,100     523,300      100,800         19.23%

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Operating exp.            72,300       44,300       28,000          63.21%

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Since we are using the 2021 income statement as base year, any change will be calculated by dividing the total change by the 2021 amount, and then multiply by 100 to get the %.

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marishachu [46]

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a short-run decision because the number of aircraft is held constant while the labor input is changed.

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In the short run, at least one variable or factor of production is fixed and cannot be changed. In the long run, all factors of production can be changed.

In this case, the number of aircraft is the fixed factor of production (capital) while labor is variable because more pilots can be hired. Regulation state that pilots must rest a certain amount of time in between flights, so if you want to increase the amount of flights you need to hire more pilots and cabin crews since regulations do not require planes to rest.

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