Business, 30.03.2020 20:49 macattack6276

Hardees' common stock sells for $21 a share and pays an annual dividend that increases by 5% annually. The market rate of return on this stock is 9%. What is the amount of the last dividend paid by Hardees? Assume the stock is in equilibrium

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Answer from: rtorres3

The correct answer is $0.8.

Explanation:

According to the scenario, the given data are as follows:

Price of stock = $21

Market rate of return = 9%

Growth rate = 5%

So, we can calculate the last dividend paid by using following formula:

Price of stock = Last dividend × (1 + Growth rate ) ÷ (Rate of return - growth rate)

By putting the value, we get

$21 = Last dividend × ( 1 + 0.05 ) ÷ ( 0.09 - 0.05 )

$21 = Last dividend × 1.05 ÷ 0.04

Last dividend = $0.8

Answer from: Quest

If its a multiple choice test, then it should be a conservationist.

Answer from: Quest

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans.

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.

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Hardees' common stock sells for $21 a share and pays an annual dividend that increases by 5% annuall...