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
Dmitrij [34]
2 years ago
8

Gentleman Gym just paid its annual dividend of $3 per share, and it is widely expected that the dividend will increase by 5% per

year indefinitely. a. What price should the stock sell at if the discount rate is 15%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What price should the stock sell at if the discount rate is 12%.
Business
1 answer:
Roman55 [17]2 years ago
6 0

Answer and Explanation:

The computation of the price that should be sell is shown below:

As we know that

Price = dividend × (1 + growth rate) ÷ (discount rate - growth rate)

a. The price is

= $3 × 1.05 ÷ (15% - 5%)

= $31.50

b. Now the price is

= $3 × 1.05 ÷ (12% - 5%)

= $45

Hence, the above represent the answer in both the cases.

You might be interested in
What are the cons of a mixed market economy for most citizens?
Romashka [77]

Answer:

It can be very difficult for citizens to start private businesses. Citizens must pay for most basic necessities by themselves. There is no guarantee of steady employment for many citizens. Citizens may pay higher taxes than in other economic systems.

Explanation:

hope i helped

4 0
3 years ago
Read 2 more answers
Who can help me? It will be greatly appreciated.
Salsk061 [2.6K]
Hello!

I believe the correct answer is: Consumer Market.
(Confirmed by three resources).

I really hope this helped you out! :)
5 0
3 years ago
Morgan Company acquires all of the outstanding shares of Jennings, Inc., for cash. Morgan transfers consideration more than the
zmey [24]

Answer:

The excess amount paid should be recognized as Goodwill.

Explanation:

Goodwill is the excess amount over net assets of the investee company, paid by investor to the shareholders of the investee company.

Goodwill is calculated as value paid to acquirer less fair value of net assets (fair value of assets minus fair value of liabilities).

8 0
3 years ago
At which stage of the service lifecycle should the processes necessary to operate a new service be defined?.
kozerog [31]

The service lifecycle should be processed to operate a new service at the stage called "service design".

<h3>What is service?</h3>

Service refers to the action done in order to provide assistance to others. In terms of it, the charges are paid for availing the services.

Everything required in transforming and run the new or updated service is described in a service design package throughout the service design stage of the lifecycle.

Therefore, it can be concluded that At the stage known as "service design," the service lifecycle should be handled in order to operate a new service.

Learn more bout service here:

brainly.com/question/12096912

#SPJ4

4 0
1 year ago
The by-product of making soap is _____, which is used in hand lotion, shaving cream, and some over-the-counter preparations.
Katena32 [7]
I think it is glycerin !!
4 0
3 years ago
Read 2 more answers
Other questions:
  • Social mobility in the u.s. does not depend on where one starts in the class system anthropolgy
    14·1 answer
  • Which of the following is not correct? a. The consumer price index gives economists a way of turning dollar figures into meaning
    7·1 answer
  • Let the equation c = 2.32 n + 34,180 represent the cost of raising a child, c, on an income, n. if the corlone family has an inc
    7·1 answer
  • The old Soviet Union devoted enormous resources exclusively to increasing its physical capital​ stock, and yet eventually the in
    7·1 answer
  • Bronson Corporation incurs the following annual costs in producing 30,000 video cards for computers: However, if Bronson purchas
    15·1 answer
  • Which one of the following terms is defined as the mixture of a firm's debt and equity financing? Multiple Choice Working capita
    7·1 answer
  • Completed Per Day
    15·1 answer
  • Greta, an elderly investor, has a degree of risk aversion of a = 3 when applied to return on wealth over a one-year horizon. She
    15·1 answer
  • If the dollar amount of total return on your mutual fund is $165 and the original cost of your investment is $1,200, then what i
    8·1 answer
  • What is one cost of avoiding insurance?
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!