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jek_recluse [69]
3 years ago
15

What is the price of a stock today if it pays a Dividend TODAY of $2. Its growth rate is 5%, and its market return is 12%?

Business
1 answer:
Nutka1998 [239]3 years ago
8 0

Answer:

$30.00  

Explanation:

The price of the stock can be derived from the stock theoretical price formula given and explained below:

stock price=expected dividend/(market return-growth rate)

expected dividend=dividend paid today*(1+growth rate)

expected dividend=$2*(1+5%)

expected dividend=$2.10

market rate of return=12%

growth rate=5%

stock price=$2.10/(12%-5%)

stock price=$2.10/7%

stock price=$30.00  

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Scenario 10 Suppose that in Country A, one worker per day can produce either 120 units of food or 50 units of capital goods; whi
aleksandrvk [35]

Answer:

1) country A has a comparative advantage in production of capital goods.

2) for country A 24 units of food can be traded for 10 units of capital goods,

for country B 30 units of food can be traded for 10 units of capital goods.

Explanation:

country A has a comparative advantage in production of capital goods because they have been able to produce more capital goods with the same amount of input (worker) than country B.

For country A, 120 units of food = 50 units of capital goods, therefore

10 units of capital good will be traded for (120 x 10)/50 = 24 units of food.

for country B 90 units of food is equivalent to 30 units of capital goods, therefore,

(90 x 10)/30 = 30 units of food

5 0
3 years ago
What is the present value of $5,000 due in ten years assuming money grows according to compound interest and the annual effectiv
nadya68 [22]

Answer:

$ 3,085

Explanation:

Given that;

The present value(PV) ------ ???

Future  payment (F) ----  $5,000

The annual effective rate are 4%, 5% and 5.5% respectively, which can be illustrated as;

r = 0.04, 0.05 and 0.055 respectively.

The present value  formula is given as:

PV=\frac{F}{(1+r)^n}

PV=\frac{5000}{(1+0.04)^3(1+0.05)^2(1+0.055)^5}

PV = 5000 × (1.04)⁻³(1.05)⁻²(1.055)⁻⁵

= $ 3,084.814759

≅ $ 3,085

8 0
3 years ago
Harold's caters to the clothing needs of men, manufacturing two different lines of fashion based on the purchasing power of its
Pavel [41]

Answer:

<u>Demographic</u>

Explanation:

Harry's caters to the clothing needs of men, manufacturing two different lines of fashion based on the purchasing power of its customer . One product line caters to the needs pf affluent , middle-aged men , and the other line targets younger , up -and - coming professionals . Harry's most likely segments the consumer market is based on<em><u> demographic variables.</u></em>

<em>The statistical data of the population of the people is known as demographics . Demographics contain age , gender , income etc.</em>

Demographic is important for the company as it help the company to tell about how to market and how to develop the brand. It helps in telling the behavior of the customer towards the product means whether the people liking the product or not liking the product . It is consider as the best way to reach to the people and know about their preference for the product.

8 0
3 years ago
Bill and rosie have been happily married for 40 years. they have never spent more than two nights apart. bill has been battling
lana66690 [7]
Hospice care 
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6 0
3 years ago
While the evidence suggests that over long periods of time that stocks will outperform bonds, individuals with a long-term inves
Scrat [10]

Answer:

Stocks and Bonds

Yes.  It is a rational behavior for individuals with a long-term investment horizon to choose to invest in bonds rather than investing in stocks despite the overwhelming "evidence that suggests that over long periods of time stocks still outperform bonds."

Rational behavior involves making rational choices that provide optimal levels of benefit or utility for the individual. People who make rational choices would rather choose bonds with lower risks and returns than stocks with higher risks and returns.

Explanation:

Every rational investor would prefer to reduce her risk exposure instead of increasing it.  Every investor is also aware that  investments with higher risks attract higher returns.  However, determining the certainty of the returns is difficult.

4 0
3 years ago
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