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
Nana76 [90]
2 years ago
8

A company just paid a dividend of $1.20 per share at the end of the year. It is expected to grow at 12% per year for three years

, after that it grows constantly at 6%. The cost of equity is 9.5%. What is the current price of stock?
Mathematics
1 answer:
grigory [225]2 years ago
6 0

The current price of the stock given the dividend, cost of equity and growth rates is $46.90.

<h3>What is the current stock price?</h3>

Thw two-stage dividend growth model would be used to determine the value of the stock.

First stage:

  • dividend in Y1 = 1.20x 1.12 = 1.344
  • dividend in Y2 = 1.20 x 1.12^2 = 1.505
  • dividend in Y3 = 1.20 x 1.12^3 = 1.69

Second stage:

Y3 = (1.69 X 1.06) / (0.095 - 0.06) = 51.059

Find the present value of these cash flows

(1.344 / 1.095) + (1.505 / 1.095²) + (1.69 / 1.095³) + (51.059/1.095³) = $46.90

To learn more about the two stage dividend model, please check: brainly.com/question/26564273

You might be interested in
The cost to rent a hall for school functions is $60 per hour. Write an expression for the cause of renting the hall for h hours.
Gre4nikov [31]
C=60h
2 hrs=$120
6hrs=$360
8hrs=$480
10hrs=$600
3 0
3 years ago
How can u tell if a number is divisible by 3?
vagabundo [1.1K]
To check for divisibility by 3 just check if the sum of all the digits in the number are divisible by 3. If so, the number itself must also be divisible by 3. For example, is 1,529 divisible by 3? Well, the sum of the digits of 1,529 is 1+5+2+9=17. Since 17 is not divisible by 3, we can conclude that 1,529 is also not divisible by 3. How about 1,530? Well, this time the sum is 1+5+3+0=9. Since 9 is divisible by 3, we know that 1,530 is divisible by 3 too.
3 0
3 years ago
Pls answer for brainlest and 50 points PLEASE EXPLAIN <br><br> In image
AlexFokin [52]

First, let's complete the angles in the triangle. Remember that the sum of the angles in a triangle is 180 degrees.

73 + 90 + x = 180

163 + x = 180

x = 17

So, the angle that completes the triangle is 17 degrees. If we look at that angle in the triangle and the one adjacent to it, we can see that those two angles form a linear pair (or are supplementary, both meaning that they add up to 180 degrees).

17 + x = 180

x = 163

So, 17's supplement is 163 degrees. The 163 degree angle corresponds with angle r, and corresponding angles are congruent.

Therefore, angle r is 163 degrees. The correct answer is option C.

Hope this helps!

5 0
1 year ago
Read 2 more answers
What is the exact area of a circle with a diameter of 18 feet?
Kitty [74]
The formula for the area of a circle is 

\pi  r^{2}

We know the diameter, and the radius is half of the diameter.  So the radius is 9.  Now we plug that into the formula.

\pi  9^{2} =81 \pi

So the answer is B, 81 pi square feet
7 0
3 years ago
Fator the following problem x^2+12x+36​
Mekhanik [1.2K]

Answer:

(x-6)^2

Step-by-step explanation:

Hope this helped

5 0
2 years ago
Read 2 more answers
Other questions:
  • Jim works mowing lawns and babysitting. He earns $9.40 an hour for mowing and $7.70 an hour for babysitting. How much will he ea
    12·1 answer
  • What is the equation of the line passing through the points (2, -1) and (5, -10) in slope-intercept form?
    5·1 answer
  • a.1/24 b.1/4 of 48 c.2/3×18 d.2/6×18 e.3/7×49 f.3/10×120 g.1/3×31 h.2/5×20 i.1/4×25 j.3/4×25 k.3/4 of a number is 27. whats the
    8·1 answer
  • (-532 + 41 – 2) + (-82² + 25 + 1) =
    9·1 answer
  • At a particular restaurant, each onion ring has 40 calories and each mozzarella stick has 60 calories. A combination meal with o
    13·1 answer
  • What fraction is greater 2/9 or 1/2?
    8·1 answer
  • How do you convert14/16 to a percent?
    9·1 answer
  • What relationship do the ratios of sin x° and cos y° share? A right triangle is shown with one leg measuring 12 and another leg
    9·1 answer
  • Find all the missing measurement​
    11·1 answer
  • .what is the answer please ​
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!