Answer:
Option (D) is correct.
Explanation:
Given that,
Dividend, D0 = $0.90
Price, P0 = $27.50
Growth rate, g = 7.00% (constant)
D1 = D0 (1 + g)
= $0.90 × (1 + 0.07)
= $0.90 × 1.07
= $0.963
Cost of equity, Ke = [ D1 ÷ P0 ] + g
= [$0.963 ÷ $27.50 ] + 0.07
= 0.0350 + 0.07
= 0.1050 i.e 10.50 %
The answers are
Savings accounts become less desirable because interest earned is lower than inflation
Individual purchasing power increases, which results in an increase in demand.
Answer:
The correct option is A, abnormal price change at the announcement
Explanation:
Abnormal price increase before the announcement would only be the case if the there was insider dealing, that is there exists information leakage.
An abnormal price decrease cannot be the case, the market prices a share based on its earnings' strength, in other words a stock with high dividends prospect is priced high.
Option D is wrong there would a price change stemming from the announcement made about large cash dividends payout
I personally don’t know about answer is D
