Answer:
Explanation:
a.)
Dividend discount model(DDM) is used to determine the price of a stock.
The formula is as follows;
Price ;P0 = D1 /(r-g)
D1 = Dividend in year 1
r = capitalization rate or required rate of return
g = dividend growth rate
P0 = 8/( 0.10-0.05)
P0 = 160.
The price of the Fi corporation's stock is therefore $160.
b.)
Use the formula that shows the relationship between ROE , retention rate and growth rate. It's as follows;
g = ROE *b
g = growth rate
b = retention rate
Given Earnings per Share (EPS) = $12 and dividend = $8, find dividend payout ratio first.
retention ratio = (1 -dividend payout ratio)
dividend payout ratio = 8/12 = 0.667 or 66.7%
retention ratio ; b = (1 -0.667)
b = 0.333 or 33.3%
Plug it in the formula;
0.05 = ROE * 0.333
ROE = 0.05/0.333
ROE = 0.15 or 15%
c.)
This question is asking for the Present Value of Growth Opportunity (PVGO)
The formula is as follows;
PVGO = Price - EPS1 /r
Price = $160 (from part a)
Expected earnings per share (EPS) = $12
required rate of return(capitalization rate) ; r = 10% or 0.10 as a decimal
PVGO = 160 - 12/0.10
PVGO = 160 -120
PVGO = $40
Therefore, the market is paying $40 per share for growth opportunities.
- How to group task into individual jobs
- How to group jobs into functions and divisions
- How to allocate authority and coordinate or integrate functions and divisions.
30 points question is easy
so?
Answer:
C) People aged 65 and older will soon outnumber children under age 5 for the first time in history
Explanation:
The world population refers to a number of populations in a word. it shows the approximation number of population in the world. It could be in millions, billions, etc
In terms of aging as we can see that the people who are aging of 65 or older would be soon more numerous than the children who comes under the age of 5 for the first time in history
Hence, the correct option is C.
