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
Anarel [89]
3 years ago
14

Burnett Corp. pays a constant $8.75 dividend on its stock. The company will maintain this dividend for the next 10 years and wil

l then cease paying dividends forever. If the required return on this stock is 12 percent, what is the current share price
Business
1 answer:
goldfiish [28.3K]3 years ago
5 0

Answer: $49.44

Explanation:

The current share price will be calculated as follows:

Dividend = $8.75

Required return rate = 12%

Number of years, N = 10

Then, the present value annuity for 10 years will be calculated as:

= (1 - (1+r)^-n) / r

= (1 - (1+12%)^-10) / 12%)

= $5.65

Then, the current share price will be:

= Dividend × present value annuity for 10 yrs

= $8.75 × 5.65

= $49.44

Therefore, the current share price is $49.44.

You might be interested in
Just because a firm is able to use its resources, capabilities, and competencies to
Arte-miy333 [17]

mind fact sub happy wala birthday quiz frist video

3 0
3 years ago
Structure is important because it helps our minds begin to develop expectations about what will happen next in a piece of music.
KatRina [158]
The term structure in music describes the layout of a composition as divided into sections. It describes<span> the way the music piece is built up.</span><span>
The statement that structure is important because it helps our minds begin to develop expectations about what will happen next in a piece of music is true.
</span>
8 0
2 years ago
MV Corporation has debt with market value of $ 101 ​million, common equity with a book value of $ 100 ​million, and preferred st
timofeeve [1]

Answer:

Weight of debt = 0.2453 or 24.53%

Weight of preferred stock = 0.0486 or 4.86%

Weight of common equity = 0.7061 or 70.61%

Explanation:

The WACC or weighted average cost of capital is the cost of a firm's capital structure. The capital structure of a company can consist of one or more of the following components namely debt, preferred stock and common stock.

To calculate the WACC, we use the market value of each component.

  • The market value of debt is$101 million.
  • The market value of common equity is 290.7 million
  • The value of preferred stock is $20 million

Market value of common equity = 51 * 5.7 = 290.7 million

The weights to assigned to each components are,

Total weight of all components = 101 + 20 + 290.7 = 411.7 million

Weight of debt = 101 / 411.7  => 0.2453 or 24.53%

Weight of preferred stock = 20 / 411.7  => 0.0486 or 4.86%

Weight of common equity = 290.7 / 411.7  => 0.7061 or 70.61%

5 0
3 years ago
Jayden is a freelance writer. He builds a good rapport with everybody he works with. Most agencies that hire him are happy with
RideAnS [48]

Answer:

open to new experiences

Explanation:

Based on he information provided within the question in regards to Jayden and his freelance work, it can be said that he can best be described as being open to new experiences. This seems to be the most accurate description since he is an open-minded and curious person who is very acceptant of other's differences and seems enthusiastic with every new job.

If you have any more questions feel free to ask away at Brainly.

4 0
3 years ago
What is an externality?
SSSSS [86.1K]
Pretty sure its D. Hope it helps
7 0
3 years ago
Read 2 more answers
Other questions:
  • A supervisor who has more than seven people reporting to him or her: select one:
    15·1 answer
  • Is it possible for a country to have a comparative advantage in producing a good without also having an absolute​ advantage? A c
    15·1 answer
  • Eaton Electronic Company’s treasurer uses both the capital asset pricing model and the dividend valuation model to compute the c
    5·1 answer
  • The contract size for platinum futures is 50 troy ounces. Suppose you need 500 troy ounces of platinum and the current futures p
    5·1 answer
  • Alter the Solow growth model so that the production technology is given by Y = zK, where Y is output, K is capital, and z is tot
    15·1 answer
  • Supply chain managers outsource logistics to meet three​ goals: A. drive down inventory​ investment, lower delivery​ costs, and
    6·1 answer
  • The amount of accounts receivable that is actually expected to be collected is known as the:a.uncollectible accounts expense. b.
    10·1 answer
  • Tuscany Company estimated the following costs at the beginning of a particular year: Overhead $5,340,000 Direct labor cost $890,
    8·1 answer
  • Which scenario is not a violation of your rights as a debtor?
    7·1 answer
  • Retailers handle the financial exchange when a customer pays for a product. This is an example of the ________ function of chann
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!