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Y_Kistochka [10]
2 years ago
15

The price of a stock is:_______.a) the future value of all expected future dividends, discounted at the dividend growth rate. b)

the present value of all expected future dividends, discounted at the dividend growth rate. c) the future value of all expected future dividends, discounted at the investors required return. d) the present value of all expected future dividends, discounted at the investors required return.
Business
1 answer:
goldfiish [28.3K]2 years ago
5 0

Answer:

The answer is D.

Explanation:

The price of a stock is also known as price of equity. This is the price the equity of a company is presently worth. The price the potential investors will be able to purchase it. One of the ways of calculating price of a stock is the Dividend Discount Model which can be calculated by:

Ke = (D1÷Po) - g

Ke is the Cost of equity(i.e the required rate of return for investors)

D1 is the next year dividend payments

Po is the price of the stock

g is the expected dividend growth rate

To get Po, we can rewrite the formula as:

Po = D1÷Ke - g÷Ke

We can see now that the expected future dividends will be discounted at the ''Ke'' which is the investors'required rate of return

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Inc.'s capital structure features 40 percent equity, 60 percent debt, and that its before-tax cost of debt is 9 percent, while i
Alex787 [66]

Answer:

WACC = ke(E/V) + Kd(D/V)

WACC = 15(0.40) + 9(0.60)

WACC = 6 + 5.4

WACC = 11.4%

Explanation:

WACC is a function of cost of equity multiplied by the proportion of equity in the capital structure plus cost of debt multiplied by the proportion of debt in the capital structure. The proportion of equity in the capital is expressed as E/V (0.40) while the proportion of debt in the capital structure is expressed as D/V (0.60).

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2 years ago
A restaurant offers hamburgers and cheeseburgers on its menu. Customers order a hamburger, indicate how it is to be cooked and w
Elina [12.6K]

Answer:

D

Explanation:

Late point differentiation is when the production process starts with a generic product and the end product is differentiated to a specific end product.  Late point differentiation is used in firms where there is a high level of demand uncertainty

<u>Advantages of Late point  differentiation</u>

1. it also consumers to receive a differentiated or customised product

2. It reduces the waiting time of consumers and allows consumers access quicker services

3 0
2 years ago
In Patrick Henry's "Speech in the Virginia convention," why do you think Henry made allusions to homer's odyssey and the bible​
Artist 52 [7]

Answer: he most persuasive figures in Virginia politics. What historical, religious, event.

Explanation:

8 0
3 years ago
Please help, I put 40 points.)
Wewaii [24]
I think the second one cause Lara study's new hybrid plants and that's what a plant scientist does and then Jon uses it to feed cattle and farmers have cattle
Sorry if wrong but I hope this helps
6 0
3 years ago
Read 2 more answers
find the nominal annual rate of interest compounded monthly if $1200 accumulates to $1618.62 in years
Gwar [14]

Answer:

Nominal annual rate of interest(r) = 2.5% (Approx)

Explanation:

Given:

Present value (P) = $1,200

Future value (F) = $1,618.62.

Number of year = 1year = 12 months

Find:

Nominal annual rate of interest(r)

Computation:

Nominal annual rate of interest(r) = \sqrt[12]{\frac{1,618.62}{1,200} }-1

Nominal annual rate of interest(r) = \sqrt[12]{1.34885}-1

Nominal annual rate of interest(r) = 0.02525

Nominal annual rate of interest(r) = 2.5% (Approx)

7 0
3 years ago
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