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Otrada [13]
3 years ago
7

A firm has experienced a constant annual rate of dividend growth of 7 percent on its common stock and expects the dividend per s

hare in the coming year to be $2.40. The required rate of return on the stock is 12 percent. The value of the firm's common stock is ________.
Business
1 answer:
Sveta_85 [38]3 years ago
3 0

Answer:

The value of the firm's common stock is $48

Explanation:

The constant dividend growth model is used to determine the market value of the share and which can be expressed as:

P = \dfrac{D}{r-g}

here;

the value of the current market price of the share (P) = unknown?

The dividend expected in the next year (D) = $2.40

The required rate of return (r) = 12% = 0.12

The growth rate (g) = 7& = 0.07

Replacing the values into the above equation:

P = \dfrac{2.40}{0.12-0.07}

P = \dfrac{2.40}{0.05}

P = $48

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Answer:

$34,600

Explanation:

The computation of beginning retained earnings balance is seen below:

But we know that;

Ending balance of retained earnings = Beginning balance of retained earnings + Net income - Dividend paid

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Beginning retained earnings = $51,600 - $21,100 + $4,100

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Answer:

The answer is mainframes.

Explanation:

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Answer: E) above the market wage, causing labor demand to be less than labor supply.

Explanation:

Minimum wage simply refers to the lowest wage that employers can pay their workers. Minimum wage is a form of price floor which means that it's typically higher than the equilibrium or market wage.

In this case, since it's higher than the market wage, there'll be an increase in the supply of labor as those that are unemployed will be willing to work duw to the increase in the wage rate.

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