This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: A. If a stock is expected to pay an annual dividend of 20 forever, what is the approximate present ... (Read 157 times)

LCritchfi

  • Hero Member
  • *****
  • Posts: 519
on: Jul 1, 2018
a. If a stock is expected to pay an annual dividend of 20 forever, what is the approximate present value of the stock, given that the discount rate is 5?
 
  b. If a stock is expected to pay an annual dividend of 20 forever, what is the approximate present value of the stock, given that the discount rate is 8?
  c. If a stock is expected to pay an annual dividend of 20 this year, what is the approximate present value of the stock, given that the discount rate is 8 and dividends are expected to grow at a rate of 2 per year?

Question 2

The Normal-Form of a game is a description including
 
  A) the players.
  B) the strategies possible.
  C) the payoffs.
  D) All of the above


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Rilsmarie951

  • Sr. Member
  • ****
  • Posts: 316
Reply #1 on: Jul 1, 2018
Answer to Question 1

a. P = D/k = 20/.05 = 400
b. P = 20/.08 = 250
c. P = D1/(k - g) = 20/(.08 - .02 ) = 333.33

Answer to Question 2

D


LCritchfi

  • Member
  • Posts: 519
Reply 2 on: Jul 1, 2018
Great answer, keep it coming :)

mohan

  • Member
  • Posts: 362
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

Chronic marijuana use can damage the white blood cells and reduce the immune system's ability to respond to disease by as much as 40%. Without a strong immune system, the body is vulnerable to all kinds of degenerative and infectious diseases.

Did you know?

Drug-induced pharmacodynamic effects manifested in older adults include drug-induced renal toxicity, which can be a major factor when these adults are experiencing other kidney problems.

Did you know?

Your heart beats over 36 million times a year.

Did you know?

Liver spots have nothing whatsoever to do with the liver. They are a type of freckles commonly seen in older adults who have been out in the sun without sufficient sunscreen.

Did you know?

Stevens-Johnson syndrome and Toxic Epidermal Necrolysis syndrome are life-threatening reactions that can result in death. Complications include permanent blindness, dry-eye syndrome, lung damage, photophobia, asthma, chronic obstructive pulmonary disease, permanent loss of nail beds, scarring of mucous membranes, arthritis, and chronic fatigue syndrome. Many patients' pores scar shut, causing them to retain heat.

Although average brain size increases gradually though time in H. erectus, individuals with small br Although average brain size increases gradually though time in H. erectus, individuals with small br
An orange-red biohazard symbol indicates that bloodborne pathogens may be present, and items should ... An orange-red biohazard symbol indicates that bloodborne pathogens may be present, and items should ...
Annual Mean Number of Days with Thunder Annual Mean Number of Days with Thunder
How to calculate present value (Question 3) How to calculate present value (Question 3)
How to calculate present value using the compound interest formula (Question 1) How to calculate present value using the compound interest formula (Question 1)
You make 4 semi-annual deposits starting at $350 and increasing at a constant rate of 2.14%. ... You make 4 semi-annual deposits starting at $350 and increasing at a constant rate of 2.14%. ...
Video: Complement Proteins Animation

For a complete list of videos, visit our video library