1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Eva8 [605]
3 years ago
14

The common stock of Eddie's Engines, Inc., sells for $37.73 a share. The stock is expected to pay a dividend of $3.70 per share

next year. Eddie's has established a pattern of increasing their dividends by 5.8 percent annually and expects to continue doing so. What is the market rate of return on this stock
Business
1 answer:
Furkat [3]3 years ago
5 0

Answer:

r = 0.1560652001 or 15.60652001% rounded off to 15.61%

Explanation:

Using the constant growth model of dividend discount model, we can calculate the price of the stock today. The DDM values a stock based on the present value of the expected future dividends from the stock. The formula for price today under this model is,

P0 = D0 * (1+g) / (r - g)

Where,

  • D0 * (1+g) is dividend expected for the next period
  • g is the growth rate
  • r is the required rate of return   or market rate of return

Plugging in the values for P0, D1, and g, we can calculate the value of r or market rate of return on the stock to be,

37.73 = 3.70  /  (r - 0.058)

37.73 * (r - 0.058) = 3.7

37.73r - 2.18834 = 3.7

37.73r = 3.7 + 2.18834

r = 5.88834 / 37.73

r = 0.1560652001 or 15.60652001% rounded off to 15.61%

You might be interested in
You are the executive director of a nonprofit that runs an animal shelter and animal services, such as low-cost spay/neuter prog
alina1380 [7]

Answer:

Providing leadership in critical times:

b. Hold meetings with employees, volunteers, and representatives of other local shelters and listen carefully as they brainstorm ideas.

c. Honestly acknowledge the challenges the organization faces while also communicating optimism about finding the resources to fulfill your mission.

Explanation:

A leader assumes responsibility for clear communication with all stakeholders and must be forthcoming with necessary information.  She must also be transparent and innovative.  A leader collaborates with her team to find better solutions to challenges facing the organization.  A good leader is a good negotiator and must remain optimistic amid the challenges of life.

3 0
3 years ago
Steel mill inc. Makes steel forms of substandard quality. Tower building company has never bought or used a steel mill form, but
rjkz [21]

The best ground on which the defendant ( Company S ) can dismiss the suit filed by the plaintiff (Company T) is the standing to sue.

<h3>What is standing to sue?</h3>

Standing to sue refers to a situation where the plaintiff who has filed the case must prove with appropriate proof of having damages or injuries in respect of the conduct of the defendant.

In the provided case, Company T has to prove that the products of Company S are actually defective through appropriate evidence. If Company T can't able to prove their alleged claim before the court, then the case is decided in the favor of the defendant party, that is, Company S.

Therefore, the standing to sue can be used as a ground by Company S for dismissing the claim of Company T.

Learn more about the standing to sue in the related link:

brainly.com/question/14820416

#SPJ4

4 0
2 years ago
A shift from labor to equipment is:
leva [86]

Answer:

In summary, labor supply is the total hours that workers or employees are willing to work at a given wage rate. Changes in income, population, work-leisure preference, prices of related goods and services, and expectations about the future can all cause the labor supply to shift to the right or left.

6 0
3 years ago
In a year in which common stocks offered an average return of 18%, Treasury bonds offered 10% and Treasury bills offered 7%, the
ivann1987 [24]
Among us in real life sus sus c
8 0
3 years ago
Nu Furniture has sales of $241,000, depreciation of $32,200, interest expense of $35,700, costs of $103,400, and taxes of $14,63
Svetlanka [38]

Answer:

$122,963

Explanation:

NU furniture have a sales of $241,000

The depreciation is $32,200

The interest expense is $35,700

The costs is $103,400

The tax is $14,637

Therefore, the operating cash flow for the year can be calculated as follows

= Sales-costs-taxes.

= $241,000-$103,400-$14,637

= $122,963

Hence the operating cash flow for the year is $122,963

5 0
4 years ago
Other questions:
  • Shao Airlines is considering two alternative planes. Plane A has an expected life of 5 years, will cost $100 million and will pr
    9·1 answer
  • Assume that the entry closing total revenues of $3,190,000 and total expenses of $2,350,000 has been made for the year. At the e
    5·1 answer
  • Which of these statements about contingent workers is true?
    11·1 answer
  • What would happen to the demand curve for movie tickets if the cost of making movies increased sharply? 2. What would happen to
    11·1 answer
  • Joe sold gold coins for $1000 that he bought a year ago for $1000. He says, "At least I didn't lose any money on my financial in
    10·1 answer
  • ________ marketing calls for socially and environmentally responsible actions that meet the present needs of consumers and busin
    11·1 answer
  • Paying taxes to governmental bodies is considered a cash outflow in the operating activities section on the statement of cash fl
    5·1 answer
  • Randy Ice starts the month with a balance on his credit card of $1000. On the 10th day of the month, he purchases $200 in clothe
    11·1 answer
  • Do you think that you could successfully negotiate a fair price for a car? If yes,
    11·2 answers
  • Imagine that a project manager creates a matrix with two variables: risk impact and probability. They use the matrix to measure
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!