asmaabdaljbar22 asmaabdaljbar22
  • 14-12-2020
  • Business
contestada

Suppose a stock is expected to pay a $0.50 dividend every quarter and the required return is 10% with quarterly compounding . What is the price ?

Respuesta :

lavishlyspoiled
lavishlyspoiled lavishlyspoiled
  • 14-12-2020

If dividends are expected at regular intervals forever, then this is a perpetuity and the present value of expected future dividends can be found using the perpetuity formula

P0 = D / R

P0 = .50 / (.1 / 4) = $20

Your price would be $20

Hope this helps :)

Answer Link

Otras preguntas

sprouting pumps of water through their trunks, the children giggle at the elephants. which of the following best corrects the dangling modifier.
change the decimal to a precent 0.0318 show work anr list steps at the side
Terri wants to make a triangle on her driveway with one side 8ft, one side 17 ft, and one side 8ft. Write an indirect proof to show that Terri’s design is not p
Assume that a coffee maker, a vacuum cleaner, a toaster, and an electric drill were all used for one hour. Which uses the most energy in that time? The answer i
math. help fast please..!!!!!
Calculate the number of H atoms in 0.185 mole C6H14O.
How does Jefferson show the colonies are not acting on impulse
0.8mj of energy are used by a blender in 3 and a half minutes. What is the power rating of the oven
Where did the spanish settle in North America
In what way was the government of ancient Athens different from that of the United States? Answer: Athens was a direct democracy in which citizens voted on law