wesen corp. will pay a dividend of $3.14 next year. the company has stated that it will maintain a constant growth rate of 4.5 percent a year forever. if you want a return of 12 percent, how much will you pay for the stock? what would the price be at a required return of 8%? what does this tell you about the relationship between the required return and the stock price?

Question

04-11-2022
Business

Answered

wesen corp. will pay a dividend of $3.14 next year. the company has stated that it will maintain a constant growth rate of 4.5 percent a year forever. if you want a return of 12 percent, how much will you pay for the stock? what would the price be at a required return of 8%? what does this tell you about the relationship between the required return and the stock price?

Answer :

Other Questions

A project with an initial investment of $437,300 will generate equal annual cash flows over its 8-year life. The project has a required return of 7. 9 percent.

If you have $100 in a savings account earning 2 percent compound interest a year, how much will you have after five years?.

list five reasons a stock will go up

Justin justice owns 55% of the outstanding stock of rego corporation. During the current year, rego sold a trailer to justin for $10,000. The trailer had an adj

Cynthia is interested in investing in clothing unlimited inc. which attribute from the stock quote can cynthia use to determine how the stock has performed over

Mary (42) and roland (43) are married with no dependents. they will file separate returns for 2021. roland files his return first and claims total itemized dedu

Brown is repaying a $1000 loan with five equal payments of principal at the end of each year. interest at an annual effective rate of 10% is paid on the outstan

A firm has a market value equal to its book value. Currently, the firm has excess cash of $600 and other assets of $5,400. Equity is worth $6,000. The firm has

On july 1 of the current calendar year, plum company paid $7,500 cash for management services to be performed over a two-year period beginning july 1. The adjus

On july 1 of the current calendar year, plum company paid $7,900 cash for management services to be performed over a two-year period beginning july 1. The adjus

kumarkrishna kumarkrishna · Answer 1 · 2022-11-08T07:54:31-05:00

Wesen corp. will pay a dividend of $3.14 next year. the company has stated that it will maintain a constant growth rate of 4.5 percent a year forever If you want a 12% return :P0 = $41.87, 8% return P0 = $89.71.

P0 = D1 / 12 for a return of 12%. (R-g)

P0 = 3.14 / (.12-.045) (.12-.045)

P0 = $41.87

P0 = 3.14 / (.08-.045) P0 equals $89.71 if you desire an 8% return. Growth rates are the changes in a particular variable's percentage over a given period of time. Growth rates can be either positive or negative depending on whether the variable's size is changing over time or staying the same. When used in the aforementioned context, the term "company" can be loosely defined as a group of individuals who have voluntarily joined forces in order to do business and divide the profits obtained therefrom. Indian law offers two primary organizational structures for these associations: "partnership" and "company."

Learn more about growth rate here :

https://brainly.com/question/13870574

#SPJ4