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NISA [10]
2 years ago
7

he next dividend payment by Savitz, Inc., will be $5.05 per share. The dividends are anticipated to maintain a growth rate of 5

percent forever. If the stock currently sells for $43 per share, what is the required return
Business
1 answer:
VashaNatasha [74]2 years ago
3 0

Answer:

16.74%

Explanation:

Current Price = Expected Dividend / (Required Return - Growth Rate)

Required Return = (Expected Dividend / Current Price) + Growth rate

Required Return = ($5.05 / $43) + 5%

Required Return = 0.1174419 + 0.05

Required Return = 0.1674419

Required Return = 16.74%

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4 0
2 years ago
Assume that a risky security pays an average cash flow of $100 in one year. The risk-free rate is 5%, and the expected return on
ki77a [65]

Answer:

The risk premium appropriate for this security is 4%.

Explanation:

The returns vary by only half as much as the market index which means that the security half as risky as the market.

The risk-premium for the security should be half of the market risk premium.

Market risk premium is calculated by = Expected return on the market - Risk free rate

Market risk premium = 13% - 5% = 8%

The risk premium on the security would be 8% / 2 = 4%

8 0
3 years ago
A city mandates that all businesses who sell goods and services to the city must pay at least a living wage to their workers tha
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Answer:

c. Higher-skilled workers are readily available at the higher wage.

Explanation:

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if High skilled workers are readily available at the higher wage this would lead to a greater  decrease in employment of low-skilled workers. Employers would ask themselves why pay the same high wages high skilled labour earns to low skilled labour when high skilled labour can be hired at the same price since most likely higher skilled workers would carry out the tasks better than lower skilled labour ?

4 0
3 years ago
Techno is planning a security offering under regulation d, rule 505. under this rule, techno can
pogonyaev
Techno is planning a security offering under Regulation D, Rule 505. Under this rule, Techno can offer an unlimited amount of securities. Securities are able to spit up different payments for profits. Through these securities regarding the regulation rule, Techno can offer a wide range of securities. 
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3 years ago
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