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Crank
3 years ago
7

Each of two stocks, A and B, are expected to pay a dividend of $5 in the upcoming year. The expected growth rate of dividends is

10% for both stocks. You require a rate of return of 11% on stock A and a return of 20% on stock B. The intrinsic value of stock A
A. will be greater than the intrinsic value of stock B.
B. will be the same as the intrinsic value of stock B.
C. will be less than the intrinsic value of stock B.
D. cannot be calculated without knowing the market rate of return.
Business
1 answer:
salantis [7]3 years ago
3 0

Answer:

a

Explanation:

Intrinsic  value can be determined using the constant dividend growth model

according to the constant dividend growth model

price = d1 / (r - g)

d1 = next dividend to be paid

r = cost of equity

g = growth rate

Stock A = $5/ (0.11 - 0.1) = $500

Stock B = $5/ (0.2 - 0.1) = 50

Intrinsic value of A is greater than that of B

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A portfolio is comprised of 100 shares of Stock A valued at $22 a share, 600 shares of Stock B valued at $17 each, 400 shares of
Dafna1 [17]

Answer:

.4792 or 47.92%

Explanation:

The computation of the weight of C is shown below:

But before that first determine the following things

For A is

= 100 × $22

= $2200

For B

= 600 × $17

= $10200

For C

= 400 × $46

= $18400

For D

= 200 × $38

= $7600

So,

Total = 38400

And, finally

weight of C is

= $18,400 ÷ $38,400

= .4792 or 47.92%

6 0
3 years ago
A person with a poor self-concept is more likely to be hired for a position, because they are easier to “mould”.
Charra [1.4K]

Answer:

False.

Explanation:

Self-concept describes the kind of person or personality an individual thinks he or she has.

People that have a realistic self-concept about themselves basically see themselves as they are, not what they or the society at large wants them to be.

The statement that a person with a poor self-concept is more likely to be hired for a position, because they are easier to “mould” is false and an absolutely incorrect notion.

First of all, no organization is interested in hiring an individual with a poor self-concept because they can't add any value to the organization in the long-run.

6 0
3 years ago
If you are falling behind on your student loan payments, which of the following steps should you take to avoid default?
larisa86 [58]
The correct answer among all the other choices is "Contact your lender." If you are falling behind on your student loan payments, this is the step you should take to avoid default. Thank you for posting your question. I hope this answer helped you. Let me know if you need more help. 
7 0
3 years ago
Read 2 more answers
What effect will each of the following have on the demand for small automobiles such as the Mini-Cooper and Fiat 500?
icang [17]

Answer:

a. Demand will increase.

b. Demand will increase.

c. Demand will increase.  

d. Demand will decline.

e. Demand will increase.

Explanation:

a. If small automobiles become more fashionable, people will prefer them more. This will lead to an increase in demand for autos.  

b. If there is an increase in the price of large automobiles and the price of the small automobiles remain the same, people will prefer the cheaper substitutes. This will cause the demand for small automobiles to increase.  

c. Inferior goods have a negative income effect. SO, when income declines the demand for small autos will increase and vice versa.  

d. If consumers expect the price of small autos to fall in the near future, they will hold their money to buy autos when their price fall. This will cause the current demand to fall.  

e. When the price of gasoline drops it will become cheaper to use autos. This will lead to an increase in demand for autos.

8 0
3 years ago
Read 2 more answers
Scrappers Supplies tracks the number of units purchased and sold throughout each accounting period but applies its inventory cos
elena-s [515]

Answer:Inventory on hand Balance at the end = $4620

Explanation:

The question is unclear with regards to the requirements. however having dealt with questions of this nature in the past, I will assume the question requires us to calculate the cost of inventory on hand.

Opening Inventory balance = 180 x $28 =$5040

Purchased inventory = 290 x $30 = $8700

Cash sale (330 x $44) = $14520

Purchase inventory (230 x 34 ) = $7820

Cash sale (55 x $44) = $2420

Inventory on hand Balance = 5040+ 8700 - 14520 + 7820 - 2420

Inventory on hand Balance at the end = 4620 = $4620

8 0
3 years ago
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