Suppose a company currently pays an annual dividend of $6.00 on its common stock in a single annual installment and management plans on raising this dividend by 5 percent per year, indefinitely. If the required return on this stock is 14 percent, what is the current share price?

The price of the current share is $70

Explanation:

Value of the stock:

The Value of the stock of the organization is the current estimation of its incomes limited at the profits required by the speculators.  

In the event that the profits of the organization are foreseen to develop at steady rate, at that point following equation can be utilized to esteem the stock:

Where,

,

Thus, the current price of the company paying annual dividend can be calculated as:

month 1 start amount =$3287.90 interest=(3287.90x0.0145/12)3.97 total to pay=$3291.81 paid =$1200 balance =$2,091.87

month 2 starting amount= $2,091.87 interest =$25.28 total to pay =$2117.15 paid =$1200 balance $917.15

month 3 starting amount =$917.15 interest =$11.08 total to pay =$928.23 paid =$928.23 balance =$0 total to pay 1200+1200+928.23 = $3328.23 it will take 3 months to pay a total of $3328.23

ans.

heterothermic organisms include those organisms that can switch between homeothermic (having body temperature higher than environment) and poikilothermic (having variation in internal body temperature) strategies.

some migratory birds show heterothermy as they decrease their metabolic rate during cold nights to keep their body temperature low. drop in metabolic rate allows increase in production efficiency of birds that reduces the internal body temperature to make it equal to external cold temperature during cold nights.

thus, the correct answer is 'birds allow their temperature drop in order to increase their production efficiency.'