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kherson [118]
3 years ago
13

Your company is estimated to make dividends payments of $2.1 next year, $3.6 the year after, and $4.2 in the year after that. Th

e dividends will then grow at a constant rate of 6% per year. If the discount rate is 9% then what is the current stock price
Business
1 answer:
asambeis [7]3 years ago
7 0

Answer:

P0 = $122.79185  rounded off to $122.79

Explanation:

The dividend discount model (DDM) can be used to calculate the price of the stock today. DDM calculates the price of a stock based on the present value of the expected future dividends from the stock. The formula for price today under DDM is,

P0 = D1 / (1+r)  +  D2 / (1+r)^2  +  ...  +  Dn / (1+r)^n  +  [(Dn * (1+g) / (r - g)) / (1+r)^n]

Where,

  • D1, D2, ... , Dn is the dividend expected in Year 1,2 and so on
  • g is the constant growth rate in dividends
  • r is the discount rate

P0 = 2.1 / (1+0.09)  +  3.6 / (1+0.09)^2  +  4.2 / (1+0.09)^3  +  

[(4.2 * (1+0.06) / (0.09 - 0.06)) / (1+0.09)^3]

P0 = $122.79185  rounded off to $122.79

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Answer:

Explanation:

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Assembling project team and assigning their responsibilities are done during which phase of a project management?.
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The first phase is the project initiation phase. Here, decisions on the need and significance of the project are taken. Feasibility, viability, and practicality are important. The project charter is drawn up, targets are set, and responsibilities are allocated.

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3 0
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sergij07 [2.7K]

Answer:

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Explanation:

Opportunity cost is the benefit profit, or value of something that is missed or given up when an individual chooses one alternative over another.  

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Answer:

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Credit scores range between 300 and 850. 300 is the lowest and the poorest score. A score of 300 indicates that the borrower has a bad history of debt repayment. They are always late on repayments,  miss on installments, or have defaulted on loans. Lenders consider such persons as high-risk borrowers and are likely to deny them credit facilities.

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