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?
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
A customer who sold a bond at a loss must wait how long before he can buy back a substantially identical bond and not have the sale classified as a wash sale? 30 days.
Victoria’s assumption is an example of projection. Projection
is being defined as a way of having to defend themselves in regards to one’s
unconscious impulses or the qualities that they have in a way of denying the
attribute that they think it doesn't exist and attribute it to others.
