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Law Incorporation [45]
3 years ago
7

The stock of Canadian Ski Wear is currently trading at $45 a share and the company is expected to pay a dividend of $1.50 a shar

e next year with an expected dividend growth rate of 4% per year. What is the expected return on the company’s common stock?
Business
1 answer:
Triss [41]3 years ago
5 0

Answer:

The expected return on the company common stock is 4,03%

Explanation:  

We can use the dividend growth model to determine the expected return on the company's common stock.

The formula is as follows P = D^{1} / ( k - g )

Where P = fair price of share ( current share price )

g = dividend growth rate (4%)

k = required rate of return

D = dividend expected in the following year ($1,50)

We need to solve for k and rearrange the formula to solve for K.

k  = D/p + g

k = 4,03%

If we substitute K into the original formula we also end up with P = 45 which is the current share price.

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The similarity of negative growth rate and zero growth rate is that there is no growth towards a positive output. For example, if the business is currently in either state, it is not earning. It may be very stagnant (for zero growth rate) or losing (for negative growth rate). Which either the case may be, it is not beneficial to the business owner. 
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Investors require an after-tax rate of return of 10% on their stock investments. Assume that the tax rate on dividends is 30% wh
IgorC [24]

Answer:

a. $28.5

b. 12.28%

c.  $29.18

d. 13.09%

Explanation:

a. let current price = p

p*1.10 = 2(1-0.3)+30

= 1.4+30/1.10

= 31.4/1.10

= 28.5

the current price of the stock is approximately 28.5 dollars

b. (30+2 /28.5)-1

= 32/28.5 - 1

= 0.1228

= 12.28%

expected before tax rate is 12.28%

c. 3(1-0.3)+30 / 1.10

= 3*0.7+30/1.10

= $29.18

d. before tax rate of return

= (3$ + 30-29.18)/29.18

= 0.1309

= 13.09%

it is now higher here given that given that a greater dividend causes more tax burden.

6 0
3 years ago
_________ management emphasized internal operations because managers were concerned primarily with meeting the explosive growth
xenn [34]

Answer:

Systematic management

Explanation:

Systematic management is an approach of management which focus on the process of the management instead of the final outcome. The objectives of this approach to the management are:

To establish the particular procedures and processes to be used in the completion of the job task.

So, the systematic management is the one which focus on the internal operations as managers are concerned with the growth brought about through the Industrial Revolution.

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Psychologists are now often included on interdisciplinary healthcare teams to
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<span>Bring in the psychological aspects of healing and good health behavior for patients.</span>
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katen-ka-za [31]

Answer:

Explanation:

The journal entries are shown below:

a. Cash A/c Dr $1,239,000     (5,900 seasons × $210)

          To Unearned basket ball tickets revenue $1,239,000

(Being the sale of the season tickets are recorded)

b. Unearned basket ball tickets revenue $103,250      ($1,239,000 ÷ 12)

               To basket ball tickets revenue $103,250    

(Being the revenue recognized)

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