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expeople1 [14]
2 years ago
14

Southern Utilities just issued some new preferred stock. The issue will pay a $19 annual dividend in perpetuity beginning 9 year

s from now. What is one share of this stock worth today if the market requires a 7 percent return on this investment
Business
1 answer:
IrinaVladis [17]2 years ago
5 0

Answer:

One share of this stock will be $97.20

Explanation:

We have given annual dividend = $19

Time t = 9 year

Market required return = 9%

Stock price in 9 year

P_9=\frac{annual\ dividend}{required\ rate}

P_9=\frac{19}{0.09}=211.11

Now current stock price is equal to

P_0=\frac{P_9}{(1+rate)^9}

P_0=\frac{211.11}{(1+0.09)^9}

P_0=97.20

So one share of this stock will be $97.20

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Bonds are considered to offer a guaranteed return, as they must be honored by law, but which is still a potential risk that inve
Fiesta28 [93]

Bonds are a type of investments that is categorized as a fixed-income instrument which symbolizes loans that investors make to a borrower. Bonds can be made by a corporation or a government. Bonds always have end dates, and they generally have lower risks compared to stocks.

However, there are still some risks associated with this type of instrument, which is (C) the issuer could go bankrupt.

7 0
2 years ago
Read 2 more answers
A local regulator has calculated the average cost of production for the public water utility. Theregulator has allowed an adjust
Varvara68 [4.7K]

Answer:

A. cost-plus regulation

Explanation:

When a local regulator calculates the average cost of production for the public water utility or any other service and allow an adjustment for the normal rate of profit the firm should expect to earn, and then set the price that consumers can be charged accordingly, this is known as cost-plus regulation.

It is usually carried out by the government.

8 0
2 years ago
The following information is taken from Reagan Company's December 31 balance sheet: Cash and cash equivalents $ 9,119 Accounts r
lozanna [386]

Answer:

40 days.

Explanation:

In the absence of the information about opening receivables, the closing figure is assumed to be the average accounts receivables,

Hence,

Debtors Turnover Ratio for Reagan:

= Sales ÷ Average Accounts Receivables

= $608,000 ÷ $73,922

= 8.22 times

Assuming that the number of days in a year as 365,

the firm's days sales uncollected for the year works out to:

= 365 days ÷ Debtors Turnover Ratio

= 365 ÷ 8.22

= 40.40 or 40 days.

4 0
2 years ago
Connie stepped in to assist her friend Fred conduct his research plan for his business. He is trying to see where he should open
Illusion [34]

Connie's next step should be

Not - go back and revisit her plan objectives

Maybe - Conduct primary research and analyze Fred's current customers.

<h3><u>Explanation:</u></h3>

It is very essential for an entrepreneur who decides to start a new business to have a business plan that helps him in setting up the businesses in the right track and usage of funds in an effective manner. A business plan acts as a blue print of a new business and the objectives and resource utilization.

In the scenario give, Fred decides to start a new boutique and has conducted researches geographic locations and the type of boutiques supported by the demography. She must not then go back and review her plan objectives as she has decided to start it with a good plan and she may conduct a primary research about the  current customers of him.

5 0
2 years ago
Which of the following statements is true of the scientific method?
nevsk [136]

Answer:

The answer is: C) The scientific method may not reveal a "true" model of the world.

Explanation:

When economists and scientists use the scientific method they are trying to develop models of the world and then test them with data. Past data is used to try to predict future economic behavior. That doesn´t mean that those models are 100% accurate and true, but rather that they might (or not) apply to specific situations.

Microeconomics relies on the use of the scientific method and econometrics, while the scientific method is not applicable in macroeconomics.

3 0
2 years ago
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