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
miv72 [106K]
3 years ago
10

Woidtke Manufacturing's stock currently sells for $25 a share. The stock just paid a dividend of $1.60 a share (i.e., D0 = $1.60

), and the dividend is expected to grow forever at a constant rate of 5% a year. What stock price is expected 1 year from now? Do not round intermediate calculations. Round your answer to the nearest cent. $ What is the estimated required rate of return on Woidtke's stock (assume the market is in equilibrium with the required return equal to the expected return)? Do not round intermediate calculations. Round the answer to two decimal places. %
Business
1 answer:
madam [21]3 years ago
8 0

Answer:

$26.25

11.72%

Explanation:

Stock price next year = current price x ( 1 + growth rate)

$25 x (1.05) = $26.25

According to the constant growth dividend growth model :

P = D1 / ( r - g)

P = price of the stock

D1 = next dividend = current dividend x (1 +growth rate)

r = required rate of return

g = growth rate

$25 = $1.60 x ( 1.05) / r - 0.05

$25 = 1.68 / r - 0.05

$25 x ( r - 0.05) = 1.68

r = 0.1172

r = 11.72%

You might be interested in
As a general rule, the Chinese government allows foreign companies to participate in its market only if those companies agree to
stealth61 [152]

Answer:

C. Joint Venture

Explanation:

A Joint Venture is a business agreement in which two or more parties agree to combine their resources in order to achieve an objective.

Companies use Joint Ventures to partner with foreign businesses in order to enter their market. This is what China is proposing in the scenario above, and it has been done in order that China might have a stake in those businesses.

<u>Advantages of a Joint Venture include:</u>

  • Access to new markets.
  • Pooling of resources.
  • Low cost of production.
  • Access to expertise ans technology, and so on.

7 0
3 years ago
The upper class makes up about 25 percent of the population in the United States. True or False
jeyben [28]
Yes that is correct :)
5 0
4 years ago
Read 2 more answers
Administrative assistants are categorized in what occupational group?
oksano4ka [1.4K]

Answer:

43-0000 Office and Administrative Support Occupations (Major Group)

Explanation:

3 0
3 years ago
Which of the following makes notes receivable different from accounts receivable? (Select all that apply.) Multiple select quest
Goryan [66]

The following makes notes receivable :

- Notes receivable are formal written contracts.

- Notes receivable have a stronger legal claim.

- Notes receivable are interest bearing.

<h3>What are Notes Receivable?</h3>

Notes receivable are a balance sheet item that records the value of promissory notes that a business is owed and should receive payment for. A written promissory note gives the holder, or bearer, the right to receive the amount outlined in the legal agreement. Promissory notes are a written promise to pay cash to another party on or before a specified future date.

If the note receivable is due within a year, then it is treated as a current asset on the balance sheet. If it is not due until a date that is more than one year in the future, then it is treated as a non-current asset on the balance sheet.

Often, a business will allow customers to convert their overdue accounts (the business’ accounts receivable) into notes receivable. By doing so, the debtor typically benefits by having more time to pay.

Learn more about Notes Receivable on:

brainly.com/question/26965875

#SPJ4

5 0
2 years ago
“For deposit only” is what type of endorsement check?
MrRissso [65]
If you write "for deposit only" on the back of a check made out to u and then sign your name , the check the check can only be desposted to your account , this is called restrictive indorsement and it should prevent you or any other person from cashing the check
8 0
3 years ago
Read 2 more answers
Other questions:
  • irect materials purchased (on account) $9,200 Conversion costs incurred 14,600 Number of guitars produced 400 guitars Number of
    13·1 answer
  • Lucky lou has just won the lottery and will receive an annual payment of $100,000 every year for the next 20 years. if the annua
    13·1 answer
  • The true owners of a corporation are the _______.
    14·2 answers
  • 1.Choose one option that defines Pathos:
    10·1 answer
  • Macro Marketing, Inc., and National Food Corporation (NFC) discuss the terms of a contract. Macro then faxes NFC a memo on Macro
    14·1 answer
  • Sadler Corporation purchased equipment to be used in manufacturing. The purchase was made at the beginning of 2015 by paying cas
    5·1 answer
  • Carol Beal is the export manager at Gudrun Sjoden USA, a licensed distributor for a Swedish designer. Carol has North America an
    8·1 answer
  • GPB's contribution margin ratio is 85% ( or .85) and its fixed monthly expenses are $63,000. Assume that the cost structure of G
    7·1 answer
  • Predict: How might learning tasks that are not part of your regular job make you a more valuable employee ?
    15·2 answers
  • From a value chain perspective, _____ are the actions a firm takes to directly provide a product or service to customers, wherea
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!