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Lelechka [254]
3 years ago
13

Brickhouse is expected to pay a dividend of $3.45 and $2.58 over the next two years, respectively. After that, the company is ex

pected to increase its annual dividend at 4.1 percent. What is the stock price today if the required return is 11.9 percent
Business
1 answer:
ICE Princess25 [194]3 years ago
5 0

Answer:

$32.6

Explanation:

Brickhouse is expected to pay a dividend of $3.45 and $2.58 over the next 2 years

The company is expected to increaser it's annual dividend at 4.1%

= 4.1/100

= 0.041

Required return is 11.9%

= 11.9/100

= 0.119

Therefore the stock price for today can be calculated as follows

= 2.58(1+0.041)/0.119-0.041

= 2.58(1.041)/0.078

= 2.6857/0.078

= 34.43

3.46/(1+0.119)+2.58/(1+0.119)^2+34.43/(1+0.119)^2

= 3.46/1.119+2.58/1.119^2+34.43/1.119^2

= 3.093+2.060+27.5

= 32.6

Hence the stock price for today is $32.6

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3 years ago
Dividend payments are defined as: a. incremental increases in the value of the stock held by an investor due to rises in share p
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Answer:

The correct option is B, the part share of the profits or earnings of a company paid to each shareholder on the basis of the number of shares

Explanation:

The shareholders are paid dividends from the distributable profits of the company and distributable profits imply profits recorded after other providers of finance such as preferred shareholders and bond-holders have been paid dividends and interest on bonds respectively.

The dividends paid can be in cash or in shares.Paying dividends in cash is known cash dividends while paying in shares is called stock dividend.

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4 0
3 years ago
in most large cities there are a large number of bakeries. these bakeries produce similar, but not identical, products. some bak
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The bakery market in a large city is an example of Monopolistic competition.

Monopolistic competition exists when many companies offer competing products or services that are similar, but not perfect, substitutes. In this case, the bakeries in large cities that produce similar, but not identical products. The market structure is a form of imperfect competition.

Some of the characteristic of a monopolistic competition structure are;

The presence of many companies.

Each company produces similar but differentiated products.

Companies are not price takers.

Free entry and exit in the industry.

Companies compete based on product quality, price, and how the product is marketed.

For further clarification refer here;

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D. All of the above
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In a closed economy, saving and investment must be equal, but this is not the case in an open economy. In the following problem,
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Answer:

Y = C + I + G + NX

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Explanation:

National Income Y = C + I + G + NX ; {where consumption, investment, government purchases, net exports ie exports - imports are corresponding expenditure of households, firms, government, rest of the world}

National Saving (S) is income (Y) left after paying for consumption (C) . So, S = Y - C

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C + S = C + I + G + NX

So, S = I + G + NX

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