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musickatia [10]
2 years ago
10

A share of common stock just paid a dividend of $1.00. If the expected long-run growth rate for this stock is 5.4%, and if inves

tors' required rate of return is 14.2%, then what is the stock price? a. $14.61 b. $12.10 c. $10.66 d. $12.70 e. $11.98
Business
1 answer:
WARRIOR [948]2 years ago
4 0

Answer:

. $11.98

Explanation:

D1 = D0(1+g)

D0 = Last dividend

r = Required rate of retrun

g = Growth rate

Stock price formula = D1/(r-g)

Stock price = D0(1+g)/(r-g)

Stock price = 1*(1+0.054) / (0.142-0.054)

Stock price = 1.054 / 0.088

Stock price = 11.97727273

Stock price = $11.98

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LekaFEV [45]

Answer:

C. some factors that are not measured or observed may affect the curve.

Explanation:

a lot of unforeseen circumstances might occur. these occurrences would not be measured in the estimated demand curve. this would lead to the estimated demand curve not matching the actual demand curve.

for example, the factors affecting the demand for bread are ; price, income, price of a substitutes. these are included in estimating the demand curve for bread. Assume that a study comes out stating that bread is harmful to the health.this reduces the demand for bread. this study wasn't anticipated and included in estimating the demand curve. as a result, the actual data would differ from the estimated data  

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4. Suppose the supply of apples sharply increases because of perfect weather conditions throughout the growing season. Assuming
koban [17]

Answer:

Apples supply increase imply new equilibrium at lower price, higher quantity. Demand downwards expansion on the curve itself is due to lower price.

Explanation:

Market is at equilibrium where Market Demand = Market Supply, & downward sloping  demand curve intersects upward sloping demand curve.

If supply of apples increase & supply curve shifts rightwards, there is Excess Supply at previous equilibrium. Excess Supply creates competition among sellers, reduces new market price.

At lower price, demand expands & supply contratcs. New Equilibrium quantity is higher where new (rightwards shifted) supply curve intersects demand curve.

Quantity demanded increases (expands - downwards movement on demand curve) due to lower price, despite of no change in demand.

7 0
3 years ago
Why are closing costs a one time fee?
mart [117]
The answer to this question is letter D. <span>The closing costs cover titles, taxes, and realtor costs. After closing, the only monetary obligation is to the lending party.

</span>Closing costs<span> are fees paid at the </span>closing<span> of a </span>real estate transaction<span>. It is called the </span>closing<span> when the </span>title<span> to the property is </span>conveyed<span> to the buyer. Closing costs then are incurred by the buyer or the seller, either of the two.</span>
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3 years ago
List and describe the six major price zones into which women's apparel is divided. what are the major factors contributing to th
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3 years ago
A. How much would you pay for a Treasury bill that matures in 182 days and pays $10,000 if you require a 1.8% discount rate?
Sonja [21]

Answer: $9909

Explanation:

Let the amount that will be paid be represented by y. The question can now be solved as:

(10000 - y)/10000 × 360/182 = 0.018

(10000-y)/10000 = 0.018 × 182/360

(10000 - y)/10000 = 0.0091

10000-y = 0.0091 × 10000

10000 - y = 91

y = 10000 - 91

y = $9909

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3 years ago
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