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
Sholpan [36]
2 years ago
11

MECCS Inc. stock paid its annual dividends of $4.90 per share yesterday. The dividend is expected to decrease at a constant rate

of 2.50 percent per year indefinitely. Investors require a rate of return of 8.60 percent on the stock. How much should one share of the stock be priced today
Business
1 answer:
emmainna [20.7K]2 years ago
7 0

Answer: $43

Explanation:

The current stock price will be calculated as:

= Do(1 - g) / (Ke + g)

where,

Do = $ 4.90

g = 2.50%

Ke = 8.60%

Po = [4.90 - (1 - 0.025)] / [0.086 + 0.025]

Po = 4.7775 / 0.111

Po = $43

The price of one share of the stock today will be $43

You might be interested in
Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annua
kolbaska11 [484]

Answer:

Price of bond = $ 924.50

Explanation:

<em>The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV).  </em>

Value of Bond = PV of interest + PV of RV  

The price of the bond can be worked out as follows:  

Step 1  

PV of interest payments  

annul interest payment = 6.4 % × 1,000 = 64

Annual yield = 7.5%

Total period to maturity (in years) =10

PV of interest =  

64 × (1- (1.075)^(-10)/)/0.075= 439.30

Step 2  

PV of Redemption Value  

= 1,000× (1.075)^(-10) =   485.19

Step 3

Price of bond  

439.30 + 485.19 =$924.49

Price of bond = $ 924.50

7 0
3 years ago
The shelby cobra retails for ?$47 comma 68447,684 ?(all taxes? included. what are the monthly loan payments for the car if you m
Dmitry [639]
The answer would be 7152. maybe hope it helps
4 0
2 years ago
WEEEEEEEEE IM GIVING OUT POINTS
ziro4ka [17]

Answer:

sweet

Explanation:

5 0
3 years ago
Read 2 more answers
Paying attention to the trends that might impact your future career is called
Mazyrski [523]
<span>The process is called futurecasting. Clustering is a completely different concept related to the organization of resources. Networking is a concept related to building social connections through self-advertising and linking networks with associates. Matchmaking is typically used in reference to specifically cultivating relationships between two people with complementary skill sets or similar core work values. Thus only futurecasting is left as an option.</span>
5 0
3 years ago
Which of the following statements comparing debit cards to credit cards is TRUE?
djverab [1.8K]
Using a credit card is like borrowing money, while debit cards let you draw directly from your bank account
8 0
2 years ago
Read 2 more answers
Other questions:
  • Condelezza Co. manufactures two products, A and B, in two production departments, Assembly and Finishing. Condelezza Co. expects
    15·1 answer
  • The second step in creating a budget is to determine your income. user: the second step in creating a budget is to determine you
    9·2 answers
  • How do sports marketers enhance the perceived value of their commodities?
    11·1 answer
  • You are saving for retirement. To live​ comfortably, you decide you will need to save $ 2 million by the time you are 65. Today
    12·1 answer
  • Beginning inventory amounted to 1,000 units. This period, 4,200 units were started and completed. At the end of the period, the
    6·1 answer
  • A famous quarterback just signed a contract for $18.6 million, providing $3.1 million a year for 6 years. A less famous receiver
    8·1 answer
  • The first step in the process of creating a marketing plan is to
    14·2 answers
  • Bentley estimates manufacturing overhead of $3,251,600 for 2013 and will apply overhead to units produced based on 739,000 machi
    11·1 answer
  • Which of the following is involved in organizing an outline?
    8·2 answers
  • The responsibilities of the board of directors includes: Group of answer choices Caring for shareholder interests A
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!