Answer:
g = 0.0738255 or 7.38255% rounded off to 7.38%
Explanation:
Using the constant growth model of dividend discount model, we can calculate the price of the stock today. The DDM values a stock based on the present value of the expected future dividends from the stock. The formula for price today under this model is,
P0 = D0 * (1+g) / (r - g)
Where,
- D0 * (1+g) is dividend expected for the next period /year
- r is the required rate of return or cost of equity
Plugging in the values of P0, D0 and r in the formula, we can calculate the value of g to be,
32 = 2.27 * (1+g) / (0.15 - g)
32 * (0.15 - g) = 2.27 + 2.27g
4.8 - 32g = 2.27 + 2.27g
4.8 - 2.27 = 2.27g + 32g
2.53 = 34.27g
g = 2.53 / 34.27
g = 0.0738255 or 7.38255% rounded off to 7.38%
Answer:
Opportunity cost is the forgone benefit that would have been derived by an option not chosen.
Explanation:
Opportunity costs represent the potential benefits an individual, investor, or business misses out on when choosing one alternative over another. Because by definition they are unseen, opportunity costs can be easily overlooked. Understanding the potential missed opportunities foregone by choosing one investment over another allows for better decision-making.
Answer:
1.68
Explanation:
Calculation to determine what The current ratio for 2018 is
Using this formula
Current ratio=Current assets/Current liabilities
Let plug in the formula
Current ratio=$109,000/$65,000
Current ratio= 1.68
Therefore The current ratio for 2018 is 1.68
