Answer:
D0 = $1.22
Explanation:
Data provided in the question:
Required rate of return, r = 11.50% = 0.115
Selling price of the stock = $29.00
Expected growth rate = 7.00% = 0.07
Now,
Stock price =
here,
D1 is the current dividend
thus,
$29.00 =
or
D1 = $1.305
also,
D0 =
or
D0 =
or
D0 = 1.219 ≈ $1.22
Answer:
Section 4(k) of the Bank Holding Company Act of 1956
Explanation:
Under section 4(k) of the Bank Holding Company Act of 1956 financial institution is any type of institution whose business is involving in activities that are financial in nature or incidental to such financial practices, as determined by this section such as banks, dealers and securities brokers, insurance underwriters and agents, finance companies, mortgage bankers, and travel agents must provide a privacy notice to each and every consumer having an explanation that what data about the consumer is collected, with whom that data is shared, how the data is applied, and how the data is protected.
Answer:
9.54%
Explanation:
we can use the dividend growth model (Gordon model) to calculate the cost of equity (Re):
current stock price (P₀) = next future dividend (Div₁) / [cost of equity (Re) - constant growth rate (g)]
Div₁ = $2.80 x 1.045 = $2.926
$58 = $2.926 / (Re - 0.045)
Re - 0.045 = $2.923 / $58 = 0.05045
Re - 0.045 = 0.05045
Re = 0.05045 + 0.045 = 0.0954 = 9.54%