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Naya [18.7K]
3 years ago
11

Queen B Corp. has a current annual cash dividend policy of $2.00. The price of the stock is set to yield 11% return. What is the

price of this stock today if the dividend will be paid for 9 year and then a liquidating final dividend of $20.00?
Business
1 answer:
Bond [772]3 years ago
6 0

Answer:

The price of the stock will be $18.04

Explanation:

The price of the stock will be the same as the present value of the future dividends including the liquidating final dividend of 20.00 discounted at 11%

present value of the dividends:

<em>Present Value of Annuity </em>

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C 2

time 9

rate 0.11

2 \times \frac{1-(1+0.11)^{-9} }{0.11} = PV\\

PV $11.0741

Then, PV of the liquidating dividend:

PRESENT VALUE OF LUMP SUM

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity  20.00

time   10.00

rate  0.11

\frac{20}{(1 + 0.11)^{10} } = PV  

PV   7.04

$11.07 + $7.04 =  $ 18.04

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3 years ago
What are the functions of depository​ institutions? The functions of depository institutions include​ _______.
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Explanation:

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Hasim's company has a history of choosing appropriate goals and achieving them. by definition, this company demonstrates?
mamaluj [8]

The history of Hasim's company always choosing appropriate goals and achieving them demonstrates <u>a) effectiveness</u>.

<h3>What is effectiveness?</h3>

Effectiveness refers to the ability to achieve the desired result or produce the desired output.

Effectiveness relates more to result-oriented performance.

Efficiency shows how effective results can be achieved with minimal resources. Initiative deals with the ability to take preemptive actions.  Esprit de corps refers to the cooperative spirit existing among teams.

Thus, the history of Hasim's company always choosing appropriate goals and achieving them demonstrates <u>a) effectiveness</u>.

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<h3>Question Completion with Answer Options:</h3>

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4 0
2 years ago
A zero coupon bond pays no interest-only it face value of $1,000 at maturity. One such bond has a maturity of 18 years and an in
Ne4ueva [31]

Answer:

12%

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FV = PV*(1+i)^n

FV = 1000, PV = 130, i = annual interest rate, n = 18

∴ 1000 = 130*(1+i)^18

==> (1+i)^18 = 1000/130

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Based on this, the classification is as follows

1, Economics of scale as the output rises that declines the LAC so automatically it goes downward

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3 0
3 years ago
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