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OLga [1]
3 years ago
9

Cincy Machinery stock currently sells for $77 per share. The market requires a return of 14 percent while the company maintains

a constant 6 percent growth rate in dividends. What was the most recent annual dividend per share paid on this stock (that is, this year's dividend)
Business
1 answer:
Mars2501 [29]3 years ago
5 0

Answer:

$5.81

Explanation:

according to the constant dividend growth model

price = d1 / (r - g)

d1 =do(1 + g) = next dividend to be paid

r = cost of equity

g = growth rate

(do x 1.06) / (0.14 - 0.06) = 77

(d0 x 1.06) / 0.08 = 77

Multiply both sides by 0.08

d0 x 1.06 = 6.16

divide both sides by 1.06

d0 = 5.81

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How do margin trades magnify both the upside potential and the downside risk of an investment position?
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3 years ago
the amount an organization must pay to compete against other companies that hire similar employees is referred to as
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qaws [65]

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