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photoshop1234 [79]
3 years ago
10

Sanders, Inc., paid a $4 dividend per share last year and is expected to continue to pay out 60% of its earnings as dividends fo

r the foreseeable future. The growth rate of dividends is expected to be 5.2%. If the firm is expected to generate a 13% return on equity in the future, and if you require a 15% return on the stock, what is the value of the stock?
Business
1 answer:
maks197457 [2]3 years ago
6 0

Answer:

The price of the stock today is $42.94

Explanation:

The price of a stock whose dividends are expected to grow at a constant rate is calculated using the constant growth model of Dividend Discount model approach. It bases the price of the stock on the present value of the expected future dividends. The price today under this model is calculated as follows,

P0 = D0 * (1+g)  /  r - g

Where,

  • D0 * (1+g) is the D1 or the dividend for the next year
  • r is the required rate of return
  • g is the growth rate in dividends

P0 = 4 * (1+0.052)  /  (0.15 - 0.052)

P0 = $42.938 rounded off to $42.94

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At a price of $15 each, Marta buys 4 books per month. When the price increases to $20, Marta buys 3 books per month. Luz says th
Lapatulllka [165]

Answer:

No, Luz is incorrect. Marta's quantity demanded has decreased, but her demand has stayed the same.

Explanation:

For $15 per book, the quantity demanded was 4 books per month.

When the price increases to $20 per book, the quantity demanded fell to 3 books per month.

This shows a decrease in the quantity demanded. A change in demand occurs when the price is constant and quantity demanded changes because of change in other factors. But here the other factors are constant and the quantity demanded is changing due to a change in price.

So, Luz's statement here is incorrect.

4 0
3 years ago
Real-time data warehousing can be used to support the highest level of decision making sophistication and power. The major featu
muminat

The major feature that enables this in relation to handling the data is speed of data transfer.

<h3>What is Real Time Data Warehousing?</h3>

Real Time Data Warehousing is a data warehouse that enables  decision  making to made speedily in real time.

Real time data warehousing is important for companies as it help to store large amount of data,  it as well support higher level of decision and the speed of data transfer are very fast.

Inconclusion the major feature that enables this in relation to handling the data is speed of data transfer.

Learn more about Real Time Data Warehousing here:brainly.com/question/18565560

5 0
3 years ago
A stock will have a loss of 13.6 percent in a recession, a return of 12.3 percent in a normal economy, and a return of 27 percen
SpyIntel [72]

Answer:

Standard deviation =21.34

Explanation:

<em>Standard deviation is measure of the total risks of an investment. It measures the volatility in return of an investment as a result of both systematic and non-systematic risks. Non-systematic risk includes risk that are unique to a company like poor management, legal suit against the company .</em>

<em>Standard deviation is the sum of the squared deviation of the individual return from the mean return under different scenarios</em>

Expected return (r) = (13.6% × 0.33 ) +  (12.3% × 0.36)  + (27%× 0.31)=17.3%

Outcome           R       (R- r )^2           P×(R- r )^2

Recession        13.6       13.6                 4.5

Normal         12.3         24.9                  8.9

Boom           27%        94.4              <u>     29.3 </u>

Total                                                <u>   42.7 </u>

Standard deviation = √42.7 = 21.34

Standard deviation =21.34

3 0
3 years ago
Evans Ltd. publishes a monthly newsletter for retail marketing managers and requires its subscribers to pay $60 in advance for a
Sav [38]

Answer and Explanation:

According to the scenario, computation of the given data are as follow:-

Total Sales = No. of Subscription Sold × Advance Price of Subscription

= 500 × $60 = $30,000

August Month Received Amount = (No. of Subscriber × Paid Amount) ÷ (1÷12 )

=(350×$60)÷1÷12

= $21,000 ÷ 12

= $1,750

Balance Sheet

Particular     Assets($)   Liabilities($)    Stockholder Equity($)   Income($)

Cash        36,000    

Unearned revenue      36,000  

Earned revenue       -1,800                                              -1,800

Total        36,000      34,200                                             -1,800

Income Statement

Income            Amount ($)                 Expense ($)      Amount ($)

Earned Revenue -1,800  

3 0
3 years ago
Indirect costs incurred in a manufacturing environment that cannot be traced directly to a product are treated as a.period costs
Dima020 [189]

Answer:

Indirect costs incurred in a manufacturing environment that cannot be traced directly to a product are treated as Product costs and expenses when the goods are sold, Option D.

Explanation:

Indirect costs are also manufacturing overheads which cannot be directly put on the product but they have to be allocated in some way. So, these are treated as 'product costs' and 'expenses' when the goods are sold. They are not period costs as per Option A and option C. Option B which says that it is product costs when incurred, which is also incorrect.

Examples of indirect costs can be accounting and legal expenses, rent, telephone expenses, salaries of administrative.

Direct costs includes the costs of direct 'labor', materials and commissions.

8 0
3 years ago
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