Business, 31.03.2020 02:43 adrianaglass12

Stock has a required rate of return of 10.25%, and it sells for $57.50 per share. The dividend is expected to grow at a constant rate of 6.00% per year. What is the expected year-end dividend, D1? a. $2.20 b. $2.69 c. $2.96 d. $2.44 e. $3.25

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Answer from: dimpleschris101

D; $2.44

Explanation:

In this question, we are asked to calculate expected year-end dividend D1 for a particular stock.

Mathematically,

Current stock price = Expected year end dividend/(Required return rate - growth rate)

Using the information in the question, we identify the following;

Current stock price = $57.50

Expected year end dividend = ?

Required return rate = 10.25%(0.1025)

Growth rate = 6%(0.06)

We can rewrite the equation as ;

Expected year end dividend = Current stock price * (Required return rate - Growth rate)

= 57.5 * (0.1025 - 0.06) = 57.5 * 0.0425 = $2.44375

Hence, the expected year-end dividend D1 = $2.44

Answer from: kimly47

D. $2.44

Explanation:

GIVEN the following ;

Required rate of return (r) = 10.25% = 0.125

Price of share (P0) = $57.50

Growth rate = 6% = 0.06

Expected year end dividend(D1)

Price of stock(P0):

= Dividend (D1) ÷ ( rate of return - growrh rate)

$57.50 = (D1) ÷ (0.1025 - 0.06)

$57.50 = D1 / 0.0425

D1 = $57.50 × 0.0475

D1 = $2.44375

Therefore, expected year-end dividend = $2.44

Answer from: Quest

you want me to join your discord for points?

Answer from: Quest

1 all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know

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Stock has a required rate of return of 10.25%, and it sells for $57.50 per share. The dividend is ex...