Afirm does not expect to pay dividends in the next four years. beginning five years from today, the firm expects to pay a constant dividend of $4.75 per year forever. investors required rate of return on the firm's stock is 10 percent. what is the price of the stock today?
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Ответ:
If $4.75 = 10%, then the price of the stock which is 100% will be equal to $4,75 * 10= $47.50.
Therefore, the current price of the stock is $47.50.
Ответ:
dividend: 4.75 per year forever
required rate of return: 10%
Since the dividend is always the same, the stock can be viewed as an ordinary perpetuity with a cash flow equal to D every period. The per-share value is thus given by
P₀ = D/R
P₀ = Price today
D = dividend per year
R = required rate of return
P₀ = 4.75 / 0.10 = 47.50
The price of the stock today is $47.50
Ответ:
Life insurance amount carry by Tim and Tammy is $140,000
Explanation:
Given:
Ages of child = 4 years and 10 years
Annual income = $70,000
Net worth = $150,000
Method: Nonworking spouse method
Computation:
Nonworking spouse method = (18 year - Youngest child age) × $10,000
Nonworking spouse method(Life insurance) = (18 year - 4 year) × $10,000
Nonworking spouse method(Life insurance) = 14 × $10,000
Nonworking spouse method(Life insurance) = $140,000
Life insurance amount carry by Tim and Tammy is $140,000