This topic contains a solution. Click here to go to the answer

Author Question: The next dividend (Div1) is 1.80, the growth rate (g) is 6, and the required rate of return (r) is ... (Read 143 times)

Deast7027

  • Hero Member
  • *****
  • Posts: 538
The next dividend (Div1) is 1.80, the growth rate (g) is 6, and the required rate of return (r) is 12. What is the stock price, according to the constant growth dividend model?
 
  A) 31.80
  B) 30.80
  C) 30.00
  D) 15.00

Question 2

If a firm with credit terms of 2/10 net 30 were to change its terms to 2/10 net 60, the result would
  probably be
 
  A) a reduction in safety stock.
  B) increased accounts receivable turnover.
  C) more customers would take advantage of the cash discount.
  D) fewer customers would take advantage of the cash discount.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Mollythedog

  • Sr. Member
  • ****
  • Posts: 340
Answer to Question 1

Answer: C
Explanation: C) The Dividend Growth Model states that P0 = .
Inserting our values gives: P0 = = = 30.00.

Answer to Question 2

D




Deast7027

  • Member
  • Posts: 538
Reply 2 on: Jul 10, 2018
Great answer, keep it coming :)


duy1981999

  • Member
  • Posts: 341
Reply 3 on: Yesterday
Excellent

 

Did you know?

The liver is the only organ that has the ability to regenerate itself after certain types of damage. As much as 25% of the liver can be removed, and it will still regenerate back to its original shape and size. However, the liver cannot regenerate after severe damage caused by alcohol.

Did you know?

The first monoclonal antibodies were made exclusively from mouse cells. Some are now fully human, which means they are likely to be safer and may be more effective than older monoclonal antibodies.

Did you know?

Elderly adults are living longer, and causes of death are shifting. At the same time, autopsy rates are at or near their lowest in history.

Did you know?

Colchicine is a highly poisonous alkaloid originally extracted from a type of saffron plant that is used mainly to treat gout.

Did you know?

The first war in which wide-scale use of anesthetics occurred was the Civil War, and 80% of all wounds were in the extremities.

For a complete list of videos, visit our video library