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vredina [299]
3 years ago
13

A stock is currently selling at 80 per share to yield an annual nominal interest rate of 10%, compounded semi-annually. The stoc

k is expected to pay dividends at the end of each year forever. The next dividend (payable one year from now) is 2 and is expected to increase at a rate of X% per year. Calculate X.
Business
1 answer:
Leni [432]3 years ago
5 0

Answer:

X is 7.75%

Explanation:

The yield on a stock is determined by dividend and stock appreciation in the market.

First, we need to calculate the effective annual yield

Effective annual yield = ( 1 + Nominal interest rate/periods per year )^numbers of compounding periods annually - 1

Effective annual yield = ( 1 + 10%/2 )^2 - 1

Effective annual yield = 1.1025 - 1

Effective annual yield = 0.1025

Effective annual yield = 10.25%

Now use the following formula to calculate the X

Price of the share = Expected dividend / ( Effective annual yield - Growth rate )

Where

Price of share = 80

Expected Dividend = 2

Effective annual yield = 10.25%

Growth rate = X

Placing values in the formula

80 = 2 / ( 10.25% - X )

0.1025 - X = 2 / 80

0.1025 - X = 0.025

-X = 0.025 - 0.1025

-X = -0.0775

X = 0.0775

X = 7.75%

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Answer: Option (C) is correct.

Explanation:

Correct option: A $50 billion decrease in government spending would be the most contractionary fiscal policy.

A. Increase the taxes by $40 billion is also a contractionary fiscal policy but it doesn't have a greater impact than decreasing  the government spending by $50 billion.

B. It is an expansionary fiscal policy.

D. There are both expansionary fiscal policy by decreasing taxes by $10 billion and contractionary fiscal policy by decreasing government spending by $40 billion. But it doesn't have much impact as the option (C) is having.

Therefore, Option (C) is having the most contractionary fiscal policy.

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3 years ago
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JulijaS [17]

Answer:

The correct answer is "equity ownership"

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represents the amount that would be returned proportionally to the company shareholders

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3 years ago
here are seven firms in the automobile industry. The market shares of the firms are 34​ percent, 21​ percent, 17​ percent, 9​ pe
Lemur [1.5K]

Answer:

The answer is  "Option 4".

Explanation:

The Herfindahl-Hirschman Index formula:

HHI=s_{12} + s_{22}  + s_{32} + s_{42} +........ + s_{n2}

here sn is the firm n's share of the market proportion represented the society in general number instead of a decimal

Index Herfindahl-Hirschman:

= (34)^2 + (21)^2 + (17)^2 + 92 + 82 + 62 + 52\\\\= 1156 + 441 + 289 + 81 + 64 + 36 + 25\\\\= 2092

Index Herfindahl-Hirschman(Result of the merger, firms with profit margins of 6% and 5% provided market shares of respectively).

= (34)^2 + (21)^2 + (17)^2 + 92 + 82 + 112\\\\= 1156 + 441 + 289 + 81 + 64 + 36 + 121\\\\= 2188

The market with just an HHI of less than 1,500 is called a competitive industry, one on an HHI of 1,500 to 2,500 is called a moderately competitive store, and one on an HHI of 2,500 or higher is considered a highly potent store by us Justice department.

All businesses operate in a moderately crowded market, as well as a merger such as this reduces competition (increases chances of monopoly). Also as result, the Justice Dept may examine its merger but will most likely deny this because the Herfindahl-Hirschman index has risen.

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3 years ago
A person is completing a Form U4 to become registered and notices that the document requires his signature. The person has an av
Olin [163]

Answer:

Explanation:

If an individual signs Form U4, that individual is agreeing to submit potential disputes with the firm, other member firms, customers, or associated persons to arbitration rather than litigation . In other words, the individual is agreeing to use arbitration as a means of resolving any disputes that involve the employer, other members, customers, or associated persons. instead of litigation. This form is mandatory and must be signed by any individual who is registering with a broker-dealer.

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The most significant distinction between technical communication and the other types of writing you've done is that technical communication has a somewhat different emphasis on audience and goal. This sort of communication is more than just delivering information; it ensures that the audience properly understands what the author wishes to express.

The goal of all technical information is to explain complex or difficult instructions, concepts, or tasks in a clear, non-personal communication and understandable manner. Science, engineering, and technology are all covered in technical writing. Specifications, manuals, data sheets, research papers, field reports, and release notes are examples of typical documents.

To learn more about communication, click here.

brainly.com/question/22558440

#SPJ4

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