answer.
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
Viktor [21]
2 years ago
7

Bensen Co. paid a dividend of $5.25 on its common stock yesterday. The company's dividends are expected to grow at a constant ra

te of 8.5% indefinitely. The required rate of return on this stock is 15.5%. You observe a market price of $78.50 for the stock. Should you purchase this stock
Business
1 answer:
emmainna [20.7K]2 years ago
3 0

Answer:

I would purchase the share as he actual value is more than its current market price

Explanation:

expected dividend in perpetuity =present dividend *growth rate

present dividend is $5.25

growth rate is 8.5%

expected dividend =$5.25*(1+8.5%)

expected dividend=$5.70

in determining the actual value of the stock we the stock price formula below:

price=expected dividend/(expected return-growth rate)

price=$5.70/(15.5%-8.5%)

price=$81.43

In actual terms the stock should be selling for $81.43, hence a buy decision at $78.50 would be a welcoming as the stock is selling beyond its real worth.

You might be interested in
1. Which of the following people is/are legally required to file a tax return?
Assoli18 [71]

Answer:

b. and d.

Explanation:

Amanda is not required to pay any tax, as She is earning less than $12200s. And, Jason as well cannot be asked to pay tax as he is earning less than the required limit. However, Greg and Erin are required to file their returns, as they are earning more than the allowed free limit.

4 0
2 years ago
Which of the following statements concerning service guarantees is FALSE? A service guarantee is a mechanism to build customer l
Serhud [2]

Answer:

A service guarantee is a way to avoid compensating customers for a service failure.

Explanation:

4 0
1 year ago
Colin has been directed by his boss to determine if the company is meeting customers' service quality expectations. One of Colin
Naya [18.7K]

Answer:

The correct answer is intangible.

Explanation:

An intangible asset is a product or service that should not be physically delivered, but that provide us with a service. An intangible product, also called service, should not necessarily revolve around a physical product; There are also so-called pure services, that is, whoever buys a service is not buying something physical; Who buys or hires a service is paying for a transformation process.

8 0
2 years ago
Casey has ​$1 comma 000 to invest in a certificate of deposit. Her local bank offers her 2.50​% on a​ twelve-month FDIC-insured
frutty [35]

Answer:

the risk premium = return of the deposit - risk free deposit return

risk premium = 5.2% - 2.5% = 2.7% or $27 for a $1,000 CD

Besides the investment risk, Casey must also consider the inflation rate and taxes. The inflation rate lowers the real interest earned by Casey: real interest rate = nominal interest rate - inflation rate. And she must also find out how the return from the non-financial institution is taxed, if it can be taxed as capital gains or regular income.

6 0
2 years ago
After spending months finalizing a marketing plan, the lead marketing manager presents it to the entire company. It soon becomes
Sauron [17]

The correct answer is A) alignment.

After spending months finalizing a marketing plan, the lead marketing manager presents it to the entire company. It soon becomes clear that the budget given in the plan is far lower than the marketing team had determined it would need. This mistake is likely a result of a lack of alignment.

This means that the marketing manager did not respect the parameters originally indicated. His numbers did not align with the necessities of the plan, which means that he did not take into consideration some important factors that at the end, affected the end result of the budget.

7 0
2 years ago
Other questions:
  • Handling inventory materials and parts, and supervising the shipping process belongs to the ______ career pathway.
    9·2 answers
  • A retired woman has $180,000 to invest. she has chosen one relatively safe investment fund that has an annual yield of 9% and an
    11·1 answer
  • PLEASE HELP FAST!!!
    9·1 answer
  • On December 31, 2020, Central Freight reported an allowance for uncollectible accounts of $15,300. During 2021, Central wrote of
    12·1 answer
  • Block Island TV currently sells large televisions for $360. It has costs of $280. A competitor is bringing a new large televisio
    6·1 answer
  • Bovindar, a wholesale distributor of gym equipment, organizes its salesforce based on the region it caters to. Therefore, the sa
    8·1 answer
  • Mr. and Mrs. Napper are interested in funding their children's college education by taking out a home equity loan in the amount
    5·1 answer
  • Dream Threads Company sells hand-sewn shirts for $40 per shirt. It incurs monthly fixed costs of $7000. The contribution margin
    11·1 answer
  • Kate and Sarah work in a bakery for 8 hours per day. Kate can make 1 cake in 1 hour or 1 loaf of bread in 2 hours. Sarah can mak
    14·1 answer
  • The Golden Group is a group of luxury hotels that caters exclusively to high-end customers who form a small part of the market a
    5·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!