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FromTheMoon [43]
2 years ago
7

What is the value of a stock which has a current dividend (D0) of $1.50, and is growing at the rate of 7%

Business
1 answer:
Fofino [41]2 years ago
4 0

Answer: $32.10

Explanation:

Here is the complete question:

What is the value of a stock which has a current dividend (D0) of $1.50, and is growing at the rate of 7%? The investor's required rate of return is 12%. a. $26.75

b. $30.00

c. $32.10

d. $21.42

e. $13.38

Current dividend =D0 = $1.50

Growth rate = g= 7% = 0.07

D1 = D0 × (1+g)

D1 = $1.50 × (1 + 0.07)

= $1.50 × 1.07

= $1.605

The value of the stock will then be:

P0 = D1 / (r - g)

P0= $1.605/(0.12 - 0.07)

P0 = $1.605 / 0.05

P0 = $32.10

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$35,800

Explanation:

Gross Profit = Net sales - Cost of goods sold

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3 years ago
ChocolateCookie Inc is a private firm. You collected information about its competitors and calculated the weighted average of th
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Answer:

1.25

Explanation:

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Here

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Vd = Value of debt $10 million

T is tax rate which is 21%.

By putting the values, we have:

ße = 1.08 × [50 + 10(1 – 21%)] / 50

ße = 1.25

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3 years ago
Changes in the economic, political, legal, and technological global system that may affect an organization are ______ forces. Fo
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Answer:

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Explanation:

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3 years ago
From this partial advertisement: Used car $93.38 per month for 60 months Cash price $4,200 Down payment $50 a. Calculate the amo
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Answer: The answer is as follows:

Explanation:

Given that,

Used car $93.38 per month for 60 months

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(c) Deferred payment price = Down Payment + Total payments

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                                             = $5652.8

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