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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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3 years ago
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Why do you think companies felt that unions were "conspiracies that interfere with property rights"?
Dafna1 [17]
Companies felt that unions were conspiracies which interfere with property right because, unions usually challenge the employers about the working conditions of their workers and the manner the employers treat their workers; they fight for the rights of the worker. Because of this, employers usually do all they can to stop unions from forming.
7 0
3 years ago
Suppose the data have a bell-shaped distribution with a mean of 25 and a standard deviation of 5. Use the empirical rule to dete
Zielflug [23.3K]

Answer:

a) 15 to 35 approximately 95%

(b) 10 to 40 approximately almost all

(c) 20 to 30 approximately 68%

Explanation:

The data have a bell-shaped distribution which means the data is equally distributed on both sides of the mean.

We have the mean at 25 and a standard deviation of 5 which means that the interval is for each of the values of 5 .

The mean would be u and

The first value would be u ±σ = 25 ± 5= 20 and 30 (68 % )

The second value will be u ± 2σ= 25± 10 = 15 and 35 (95%)

The third value will be u ± 3σ= 25 ± 15 = 10 and 40 (99.7 % almost all)

In the figure below the light blue region gives u ±σ on both sides of the mean

, dark blue gives u ± 2σ values on both sides of the mean and grey gives

u ± 3 σ values on both sides of the mean.

It is obvious that 68 % of the data is contained in the u ±σ light blue region, 95 % of the data in the  u ± 2σ dark blue including light blue and 99.7 % in the u ± 3σ all colored regions.

3 0
3 years ago
Langston will pay $575 to three different credit cards: Expert Card, Passport, and US Speedy. She will pay three times as much t
Gre4nikov [31]

Answer:

$75

Explanation:

Let, the payment made towards US Speedy credit card be 'U'

Therefore,

According to the question:

Payment made towards Express credit card, E = 3U

Total for the two cards = U + E

= U + 3U

= 4U

also,

Payment made towards passport credit card = 15% of 4U

= 0.15 × 4U

= 0.6U

Given: Total payment made = $575

Therefore,

E + U + 0.6 U = $575

or

3U + U + 0.6U = $575

or

4.6U = $575

or

U = $125

Hence,

Payment made towards passport credit card = 0.6U

= 0.6 × $125

= $75

6 0
3 years ago
Which of the following statements supports multiple sourcing:
Makovka662 [10]

Answer:

Concerns exist about supplier capacity for future volume.

Explanation:

The multisourcing is a method in which the supplier base is expanded increasing the actual number of suppliers, because the needs of the company are increasing.

Advantages:

-Alternative sources of materials in case of delivery stoppage by a supplier.

-Reduced probability of bottlenecks due to insufficient production capacity to meet peak demand.

- Increased competition mong suppliers leads to better quality, price, delivery, product innovation and buyer´s negociation power.

-More flexibility to reat to unexpected events that could endanger supplier´s capacity.

Disadvantages:

-Reduced efforts by supplier to match buyer´s requirements.

-Higher cost for the purchasing organization (greater number of orders, telephone calls, records, and so on).

3 0
3 years ago
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