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Feliz [49]
2 years ago
9

17. Wislow Brothers common stock sells for $30 a share and pays an annual dividend that increases by 4 percent annually forever.

The market rate of return on this stock is 10 percent. What is the closest value to the amount of the dividend in two years
Business
1 answer:
Neko [114]2 years ago
6 0

Answer:

$1.95

Explanation:

according to the constant dividend growth model

price = d1 / (r - g)

d1 = next dividend to be paid

r = cost of equity

g = growth rate

30 = d / 0.1 - 0.04

d = 30 x 0.06 = 1.8

growth in 2 years = 1.8 x (1.04^2) = $1.95

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Suppose Intel stock has a beta of 1.6, whereas Boeing stock has a beta of 1. If the risk-free interest rate is 4% and the expect
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What is the interest rate for initial investment of $100,000 to grow $300,000 in 10 years
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Answer:

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6 0
2 years ago
Read 2 more answers
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