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VARVARA [1.3K]
3 years ago
15

What constant-growth rate in dividends is expected for a stock valued at $32.40 if next year's dividend is forecast at $2.20 and

the appropriate discount rate is 13.6%
Business
1 answer:
Fittoniya [83]3 years ago
6 0

Answer: 6.81%

Explanation:

To calculate the growth rate, we'll use the formula:

Price = Expected Dividend / Discount - Growth rate

32.40 = 2.20 / 13.60% - Growth rate

13.6% - Growth rate = 2.20/32.40

Growth rate = 13.60% - 6.79%

Growth rate = 6.81%

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Answer:

A. 571.423

B .545.45

Explanation:

A. Calculation for the present value of a perpetuity

Present Value = $600*1 /(1+.05)

Present Value = $600*1 /1.05

Present Value =571.423

Therefore the Present value of a $600 perpetuity if the interest rate is 5 % will be 571.423

B. Calculation for the present value if thr interest rate doubled to 10%,

Present Value = $600 /(1+.01)

Present Value = $600/1.01

Present Value =545.45

8 0
3 years ago
What are two basic types of soup<br><br>​
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Answer:

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3 years ago
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g The round-trip business class airfare from Boston to Amsterdam (from August 18 through August 21) is $6,000. The round-trip bu
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Answer:

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3 years ago
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Kaiser Industries has bonds on the market making annual payments, with 12 years to maturity, a par value of $1,000, and a curren
MissTica

Answer:

Explanation:

Current price = Annual coupon*Present value of annuity factor(7.2%,12)+$1000*Present value of discounting factor(7.2%,12)

1142.60=Annual coupon*7.85871162+$1000*0.434172763

1142.60=Annual coupon*7.85871162+434.172763

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3 years ago
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Explanation:

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dont forget your promis....I’m giving 100 points and brainliest!!

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3 years ago
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