1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
aalyn [17]
3 years ago
14

Hyper, Inc. is a growing firm that chooses to payout only 20% of its earnings as dividends (thus, it has a plowback ratio of .8)

. Hyper expects EPS next year of $5 and and a Return on Equity of 15%. This ROE is expected to be maintained indefinitely and is also appropriate to use for Hyper's required return on equity. Given this information, what is the current price of Hyper, Inc. stock
Business
1 answer:
alukav5142 [94]3 years ago
4 0

Answer:

a.$33.33

Explanation:

Options are "<em>a.$33.33 , b. $30.13 , c. $16.67 , d. $26.66"</em>

<em />

EPS1 = $5

D1 = 0.20($5) = $1

Sustainable Growth Rate = (0.80)(0.15) = 12%

As per Dividend Discount Model,

Stock Price = D1/(r - g)

Stock Price = 1/(0.15 - 0.12)

Stock Price = $33.33

Therefore, the current price of Hyper, Inc. stock $33.33

You might be interested in
From 2007 to 2012, the u.s. personal savings rate rose. if the additional savings were not translated into investment, keynes wo
ankoles [38]
Keynes would predict that aggregate income would decline, but rise in the future, if the additional savings were not translated into investment.
According to the Keynesian model. the government puts price controls on the economy, keeping the price level fixed.
6 0
3 years ago
(h) if you had $5,000 to start this company, which department would get the most funding? which department would get the least f
tatyana61 [14]
<span>If I were to start a business, the most money would be spent on hiring the right people for the job. The least money would be spent on advertising right off the bat because you need the vision of your newly-hired creatives to create the right advertising campaign for your business.</span>
4 0
3 years ago
Which of the following four companies will have the lowest carrying value on their bonds if they decide to redeem their bonds be
Dennis_Churaev [7]

Answer:

C) Company 1 sold their bonds at 94 and redeemed them at 106.

Explanation:

The face value of bond issued in 4 companies are same, then it's clearly that the company 1 will have the lowest carrying value on their bonds because they sold at lowest price but buy back (redeem) at highest prices.

6 0
3 years ago
To become industrial, a nation must have raw materials, workers, and capital. True or false?
saul85 [17]
To become industrial, a nation must have raw materials, workers and capital is absolutely true. Without any of the things mentioned, it is impossible to become an industrial nation. The raw materials are required to produce the finished product. The workers are the ones that work in industries to produce the finished proudest from the raw materials. It can be physical as well as mental labor. Capital is required to buy raw materials and labor for getting the finished product and make profit.


7 0
3 years ago
Why is business plan necessary?​
Agata [3.3K]

Answer:

Business plan necessary because:

•It make you aware of your strength or weakness.

•It also creates an effective strategy for growth.

•It helps to determine your future financial needs.

•It also helps to gain a deep understanding of your market.

7 0
2 years ago
Other questions:
  • A gum manufacturer wants to determine whether blue packaging or red packaging is preferred. The company performs a sales test by
    9·1 answer
  • In ___, a committee or group of people often make the buying decision and consider the organization's objectives, purchasing pol
    6·1 answer
  • What is a formal arraignment to limit the production of a product
    7·1 answer
  • Which of the following is NOT a proactive hiring procedure? a. ​conducting background investigations on prospective employees b.
    12·1 answer
  • Woody Corporation acquired 70% of Buzz Company’s voting common stock on January 1, 20X3, for $158,900. Buzz reported common stoc
    7·1 answer
  • Perry Partnership distributed cash of $15,000 and a parcel of land in a liquidating distribution to Gupta, a partner. The land h
    5·1 answer
  • In the face of demographic pressures dealing with an aging workforce, many employers try to use _____ among their older workers
    7·1 answer
  • What do you mean by final account? Mention its objectives​
    15·2 answers
  • economics is the study of how limited resources are used to satisfy human wants. economists look at the causes and effects of th
    5·1 answer
  • Why did Henry Gantt suggest that frontline supervisors should receive a bonus for each of their workers who completed their assi
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!