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marissa [1.9K]
3 years ago
5

Eastern Electric currently pays a dividend of about $1.96 per share and sells for $37 a share. A. If investors believe the growt

h rate of dividends is 4% per year, what rate of return do they expect to earn on the stock? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Business
1 answer:
maksim [4K]3 years ago
5 0

Answer:

Rate of return = 9.53 % (Approx)

Explanation:

Given:

Dividend per share = $1.97

Sales price = $37

Growth rate of dividends = 4% = 0.04

Find:

Rate of return

Computation:

Rate of return = D(1+g)/p + g

Rate of return = 1.97(1+0.04)/37 + 0.04

Rate of return = 9.53 % (Approx)

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pshichka [43]

Based on the information given the annual interest payments amount to:$800.

<h3>Annual interest payments:</h3>

The 10M represent 1-1,000 bonds which is $10,000

Using this formula

Annual interest payment= Interest rate annually×Bonds

Where:

Interest rate annually=8%

Bonds=$10,000

Let plug in the formula

Annual interest payment=8% of $10,000

Annual interest payment=$800

Inconclusion the annual interest payments amount to:$800.

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3 years ago
Which of the following is a downside of a newspaper ad?
AURORKA [14]

Answer:

The ads have a short shelf life.

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3 years ago
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kupik [55]

Answer:

If the required rate of return is 14 percent, the price I am willing to pay is 11.113

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To calculate what you are willing to pay today to purchase stock in this company if your required rate of return is 14 percent, you have to use the following formula.

Po = D1 / (k-g)

Po = purchase price

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4 years ago
Taylor Company had a salaries payable balance of $18,000 on December 31, 2014. During 2015, it paid $50,000 in cash as salaries,
Flura [38]

Answer:

$18,000

Explanation:

Given data  for Taylor Company;

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The  Kenya Airway’s solution was the use of:

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