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olya-2409 [2.1K]
3 years ago
8

Gnomes R Us just paid a dividend of $1.90 per share. The company has a dividend payout ratio of 25 percent. If the PE ratio is 1

6.9 times, what is the stock price
Business
1 answer:
Verizon [17]3 years ago
8 0

Answer:

Stock price=$128.44

Explanation:

Calculation for stock price

First step is to calculate for dividend payout ratio using this formula

Dividend payout ratio=Dividend payout/Earnings

Let plug in the formula

Earnings=($1.90/0.25)

Earnings=$7.6

Now let calculate for PE ratio using this formula

PE ratio=Stock price/EPS

Let plug in the formula

Stock price=$7.6*16.9times

Stock price=$128.44

Therefore Stock price will be $128.44

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The strategy adopted by Nintendo in this example is the _____ strategy.

C) blue ocean

Explanation:

Blue ocean is a strategy that says innovation, simultaneous pursuit, and low cost are key concepts to achieve a successful business and establish an advantage in the market. It is a very proactive system that allows the constant improvement, elimination, reduction, and creation of corporate actions. It is a global and general perspective that allows the management team to know the state of the company at any time.

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Data given in the question

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= ($175,000 + $5,000) ÷ (8 years)

= $22,500

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