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 170 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 :)

tanna.moeller

  • Member
  • Posts: 328
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

The highest suicide rate in the United States is among people ages 65 years and older. Almost 15% of people in this age group commit suicide every year.

Did you know?

Medication errors are three times higher among children and infants than with adults.

Did you know?

Approximately one in four people diagnosed with diabetes will develop foot problems. Of these, about one-third will require lower extremity amputation.

Did you know?

Walt Disney helped combat malaria by making an animated film in 1943 called The Winged Scourge. This short film starred the seven dwarfs and taught children that mosquitos transmit malaria, which is a very bad disease. It advocated the killing of mosquitos to stop the disease.

Did you know?

About 100 new prescription or over-the-counter drugs come into the U.S. market every year.

Metric bolt (cap screw) grade markings and approximate tensile strength. Metric bolt (cap screw) grade markings and approximate tensile strength.
How to combine approximate and exact numbers when considering significant digits How to combine approximate and exact numbers when considering significant digits
Scientists should use a variety of media to present the message Scientists should use a variety of media to present the message
Average Annual Growth Rates of Population by Country Group Average Annual Growth Rates of Population by Country Group
ADHD (Stock photo) ADHD (Stock photo)
Causes of Trauma Deaths by Approximate Percentage Causes of Trauma Deaths by Approximate Percentage
Video: Factors that influence muscle tension - Sarcomere length and force, understretched and overstretched

For a complete list of videos, visit our video library