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 185 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
:D TYSM

xthemafja

  • Member
  • Posts: 348
Reply 3 on: Yesterday
Gracias!

« previous next »
 

Did you know?

The senior population grows every year. Seniors older than 65 years of age now comprise more than 13% of the total population. However, women outlive men. In the 85-and-over age group, there are only 45 men to every 100 women.

Did you know?

No drugs are available to relieve parathyroid disease. Parathyroid disease is caused by a parathyroid tumor, and it needs to be removed by surgery.

Did you know?

Malaria mortality rates are falling. Increased malaria prevention and control measures have greatly improved these rates. Since 2000, malaria mortality rates have fallen globally by 60% among all age groups, and by 65% among children under age 5.

Did you know?

In 1844, Charles Goodyear obtained the first patent for a rubber condom.

Did you know?

Blastomycosis is often misdiagnosed, resulting in tragic outcomes. It is caused by a fungus living in moist soil, in wooded areas of the United States and Canada. If inhaled, the fungus can cause mild breathing problems that may worsen and cause serious illness and even death.

Metric bolt (cap screw) grade markings and approximate tensile strength. Metric bolt (cap screw) grade markings and approximate tensile strength.
Change in Annual Precipitation Over Land, 1901-2010 Change in Annual Precipitation Over Land, 1901-2010
How to calculate present value (Question 1) How to calculate present value (Question 1)
Human population growth, 1700 - present Human population growth, 1700 - present
Expected Distribution of IQ Scores Expected Distribution of IQ Scores
Jia's Fashions recently paid a $2 annual dividend. The company is projecting that its ... Jia's Fashions recently paid a $2 annual dividend. The company is projecting that its ...
Video: Stages of Mitosis - Prophase, Prometaphase, Metaphase, Anaphase & Telophase

For a complete list of videos, visit our video library