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Setler79 [48]
4 years ago
11

Which of the following statements is CORRECT?a. If a stock has a required rate of return rs = 12% and its dividend is expected t

o grow at a constant rate of 5%, this implies that the stock's dividend yield is also 5%.b. The stock valuation model, P0 = D1/(rs − g), can be used to value firms whose dividends are expected to decline at a constant rate, i.e., to grow at a negative rate.c. The price of a stock is the present value of all expected future dividends, discounted at the dividend growth rate.d. The constant growth model cannot be used for a zero growth stock, where the dividend is expected to remain constant over time.e. The constant growth model is often appropriate for evaluating start-up companies that do not have a stable history of growth but are expected to reach stable growth within the next few years.
Business
1 answer:
-BARSIC- [3]4 years ago
5 0

Answer:

B

Explanation:

Let analyse the answer option one by one:

A. False

Recalling the dividen discounted model (DDM):

<em>Current stock price = Next year dividend/(Required rate of return - Dividend growth rate) </em>

Transform the formula a bit we have:

<em>Next year dividend/Current stock price = Required rate of return - Dividend growth rate </em><em>or</em>

<em>Dividend yield = Required rate of return - Dividend growth rate = 12% - 5% = 7%.</em>

B. True

C. False

Stock price is the present value of all expected future dividends, discounted <u>at cost of equity</u>.

D. False

The constant growth model <u>can be</u> used for a zero growth stock, where the dividend is expected to remain constant over time. In this case:

<em>Current stock price = Dividend/Required rate of return</em>

E. False

This model is suitable for mature firm with stable earning growth.

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19. An investor has purchased a property that is giving him a 10% rate of return. Potential gross rents total $10,000.00 a month
gogolik [260]

Answer:

the market value of the property is $628,300

Explanation:

The computation of the market value of the property is shown below;

Gross rent $10,000 × 12= $120,000

Now

= $120,000 ×  .92 (occupancy rate)

= $110,400

After that

= $110,400 - $47,570

= $62,830

And ,finally the market value of the property is

= $62,830 ÷ 0.10  

= $628,300

hence, the market value of the property is $628,300

4 0
3 years ago
Attina always spends 20 % of her income on snarfblatts. Assume that her income increases by some percentage while the price of s
cestrela7 [59]

Answer:

Income elasticity of demand for snarfblatts is 1.

Explanation:

the consumer spends 20% of the income on snarfblatts, thus the percentage change in consumption of the snaerblatts is equal to the percentage in income, that is:

Elasticity = % change in demand of snarfblatts/% change in income

               = 1

Therefore, Income elasticity of demand for snarfblatts is 1.

6 0
3 years ago
Scenario C. Parker Brothers is a high-end furniture manufacturer located in the Midwest, Mr. Herbert "Bud" Parker started the fi
Reika [66]

The correct answer is A) organization culture.

The other options of the question were B) the company's macroenvironment. C) the organization's competitive environment. D) collective competitive intelligence. E) organizational structure.

The stories about the "Parker Legends" and the organization's most innovative designs are all clues to understanding the organization's culture.

This is the importance of the culture of a company. The series of values, principles, mission, and vision that characterizes and makes the company unique. Every single employee in the company shares these values and can be transmitted through time to new workers. "Parker Legends" is a tradition that is respected and is part of the organization's DNA.

5 0
3 years ago
Land was acquired in 2018 for a future building site at a cost of $40,000.
maw [93]

Answer:

(A) $40,000

Explanation:

At the time of recording of the fixed assets, the fixed assets should be recorded at purchase cost or historical price

Since in the question, the land was purchased at $40,000. Moreover, for the tax purpose, the land is valued at $27,000 and the qualified appraiser appraise the value at $48,000. The cash payment is also offered for $46,000

But at the time of recording or reported, the balance sheet would show at the purchase price i.e $40,000

3 0
3 years ago
Select 3 goals or objectives that a leadership plan might include to achieve a solid business strategy. Multiple select question
Alenkinab [10]

The leadership plans that must be included to achieve a solid business strategy are options A, C, and D. Option A is to increase sales; Option C is to attract new customers; and Option D is to reduce costs.

<h3>What is a business strategy?</h3>

An outline that is drawn by keeping in mind the set of goals, plans, or actions that are to be achieved by the company for a successful business in the market with the same kind of product or service is known as a business strategy.

In simple words, to make the growth of business continuous and to maintain the position of business or to grow it, a systematic plan is made on which all the employees of the firm work. This plan is known as a business strategy.

Therefore, 3 goals or objectives that a leadership plan might include to achieve a solid business strategy are option A: increasing sales power, Option C is to attract new customers, while Option D is to reduce costs.

Learn more about business strategy from here:

brainly.com/question/3325483

#SPJ1

4 0
2 years ago
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