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
Ne4ueva [31]
2 years ago
8

Fowler is expected to pay a dividend of $1.81 one year from today and $1.96 two years from today. The company has a dividend pay

out ratio of 40 percent and the PE ratio is 18.95 times. If the required return on the company's stock is 11.9 percent, what is the current stock price?
Business
1 answer:
Mekhanik [1.2K]2 years ago
6 0

Answer:

$77.34

Explanation:

The computation of the current stock price is shown below:

But before that following calculations need to be done

EPS for year 2 = Dividend at year 2 ÷ Payout Ratio

= $1.96 ÷  0.40

= $4.90

Now  the price at year 2 is

Price at year 2 ÷ EPS at year 2 = PE ratio

Price at year 2 ÷ $4.90 = 18.95

Price at year 2 = $92.855

Now finally the current stock price is

= Dividend at year 1  ÷ (1 + rate of interest) + Dividend at year 2 ÷ (1 + rate of interest)^2 + Price at year 2 ÷ (1 + rate of interest)^2

= $1.81 ÷ 1.119 + $1.96 ÷ 1.119^2 + $92.855 ÷ 1.119^2

= $77.34

You might be interested in
Bob Jensen Inc. purchased a $650,000 machine to manufacture specialty taps for electrical equipment. Jensen expects to sell all
wolverine [178]

Answer:

?????????????????????

Explanation:

5 0
3 years ago
Which information would most likely cause a company's stock price to go up?
Andrei [34K]

Answer:

A

Explanation:

consumers reduce spending because of a recession

8 0
3 years ago
Security in the form of assets you pledge to a lender.
Anuta_ua [19.1K]
C is the answer. Hope this helps.
6 0
3 years ago
Read 2 more answers
Select the correct answer.
Naya [18.7K]
C is the correct answer
4 0
3 years ago
Read 2 more answers
Anika knows that her company has a formal code of conduct, but she does not see this code being equally and consistently applied
Luda [366]

Answer:

<u>Opportunity</u>

Explanation:

A code of conduct creates a formal way of how employees maintain a standard of conduct while interacting and discussing ideas.

Such a conduct is essential for any organization since it implements the abidance by rules and organizational policies treating everybody equally and ensuring just and fair treatment to all.

In the given case, an employee observes the existence of a formal code of conduct at her workplace which is not implemented consistently at all levels and covering all employees.

Such negligence in implementation would lead to an enhancement of the possibility and creates an opportunity for employees to commit unscrupulous acts, being aware of the shortcomings in the implementation of such formal code of conduct.

7 0
3 years ago
Other questions:
  • Kendall Corp. purchased at par value $160,000 of Barker Company's 7% bonds that mature in 10 months. The bonds pay interest semi
    5·2 answers
  • Jason trevor owns a commercial bakery in blakely, georgia that produces a variety of goods sold in grocery stores. trevor is req
    7·1 answer
  • Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance Sheet Beginning Balance Ending Balance
    14·1 answer
  • Product warranties are an expense of the period in which the product is sold
    12·1 answer
  • Polar Containers makes​ high-end coolers for camping. The total task time needed to make a cooler is 310 ​seconds, with the long
    10·1 answer
  • An ex-gratia claim made when a project is closed down is made when
    6·1 answer
  • How might the consumer protection laws of a country affect global business activities
    14·1 answer
  • In a perfectly competitive market, a firm's short-run supply curve is:_________.
    12·1 answer
  • In a move to provide additional sales for U.S. car manufacturers, the White House announced the purchase of 17,600 new fuel-effi
    5·1 answer
  • A nation's ability to produce a product more efficiently than another country is referred to as
    6·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!