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
Issuing Bonds at a Discount On the first day of the fiscal year, a company issues a $4,000,000, 6%, 8-year bond that pays semian
Svetradugi [14.3K]

Answer:

Dr cash proceeds                          $3,325,959

Dr discount on bonds payable        $674,041

Cr bonds payable                                               $4,000,000

Explanation:

The cash proceeds from the bond issuance is $3,325,959

The face value of the bond issued is $4,000,000

Discount on bond  issuance=$4,000,000-$3,325,959

Discount on bond  issuance=$674,041.00  

The appropriate double entries would be to debit the cash account and discount on bonds payable with $3,325,959 and $674,041 resepectively while bonds payable is credited with $4,000,000

7 0
3 years ago
Which form of feasibility incorporates both physical and mental integration of the design work system during job completion
Oduvanchick [21]

The form of feasibility that incorporates both physical and mental integration of the design work system during job completion is technical.

<h3>What is operation management?</h3>

Operations management basically has to do with the efficiency of an organization in terms of its product and service offerings. It also include planning, managing and supervising in an organization.

It is to be noted that the goal of operations management is to maximize efficiency while producing goods and services that effectively fulfill customer needs

Learn more about operation management here : brainly.com/question/1382997

#SPJ1

3 0
1 year ago
Holly’s Candle Shop sells scented candles. The shop offers hundreds of different types of candles, but they are all priced at ei
ANTONII [103]

Answer:

C) price lining

Explanation:

Based on the information provided within the question it can be said that Holly’s Candle Shop appears to be using price lining. This refers to a business decision in which a range of products from the same product line are priced differently depending on the difference in quality. Which is most likely the case in Holly's store since she sells only candles but the higher quality candles are priced at $10 while the lowest quality ones are priced at $6.

7 0
3 years ago
Consider the market demand for peanut butter.Complete the following table by indicating whether an event will cause a movement a
EleoNora [17]

Answer:

A change in the expectations of consumers about prices - a shift of the demand curve for peanut butter

A decrease in the price of peanut butter - a movement along the demand curve for peanut butter

A decrease in the number of consumers - a shift of the demand curve for peanut butter

Explanation:

Only a change in price of a product would lead to a movement along the demand curve for that product.

A decrease in the price of peanut butter would increase the quantity demanded for butter. This would lead to a movement down the demand curve.

A change in the expectations of consumers about prices can shift demand curve either to the left or right.

A decrease in the number of consumers would shift the demand curve to the left.

I hope my answer helps you

8 0
3 years ago
The risk-free rate of return is 4 percent and the expected return on the market is 13.5 percent. What is the expected return for
Vilka [71]

Answer:

im sorry

Explanation:

6 0
3 years ago
Other questions:
  • For a school to be accredited, it must be certified in all of the following except _____.
    15·2 answers
  • Any point on a country's production possibilities frontier represents a combination of two goods that an economy:
    14·1 answer
  • Match the different categories of income to the calculation used to derive them.
    6·2 answers
  • The rule of 72 is useful in calculating the
    8·1 answer
  • The Gasson Company uses the weighted-average method in its process costing system. The company's ending work in process inventor
    15·1 answer
  • You would like to have $50,000 saved at the end of Year 5. At the end of Year 2, you can deposit $7,500 for this purpose. If you
    7·1 answer
  • Makers Corp. had additions to retained earnings for the year just ended of $248,000. The firm paid out $187,000 in cash dividend
    13·1 answer
  • The unadjusted trial balance for Sheffield Corp. is shown below.
    5·1 answer
  • Giving customers time to pay their bill generates more sales. But when a recession hits, they may have trouble making payments.
    10·1 answer
  • The following table shows a portion of a four-year amortization schedule. A 4-year amortization schedule. The loan amount or pri
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!