Ask Question
BusinessBusiness
23 February, 14:28

Braxton's Cleaning Company stock is selling for $34.75 per share based on a required returmn of 10.4 percent. What is the the next annual dividend if the growth rate in dividends is expected to be 3.9 percent indefinitely?

+1
Answers (1)
  1. 23 February, 14:33
    0
    Answer: Po = D1/Ke + g

    $34.75 = D1/0.104 + 0.039

    $34.75 - 0.039 = D1/0.104

    $34.711 = D1/0.104

    D1 = 34.711 x 0.104

    D1 = $3.61

    Explanation: In this question. there is need to apply the formula for determining the current market price of a common stock. The current market price of a common stock is a function of next dividend capitalised at the appropriate cost of equity plus growth rate. in addition, we need to make the next dividend the subject of the formula.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Braxton's Cleaning Company stock is selling for $34.75 per share based on a required returmn of 10.4 percent. What is the the next annual ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Which managerial function involves setting goals, establishing a strategy to pursue those goals, and forecasting future threats and opportunities that might influence the company's needs and strategies?
Answers (1)
g McGuire was an employee of First National Bank of Grayson (FNBG). FNBG participated in a Kentucky Housing Corporation (KHC) program in which KHC loaned money to financial institutions.
Answers (1)
Zoltan announced to his accounting team that the company's financial reports should be completed "by next week." Subsequently, members of his team had completely different ideas about when the reports were due.
Answers (1)
Which assumption or principle requires that all information significant enough to affect decisions of reasonably informed users should be reported in the financial statements? Going concern. Historical cost. Full disclosure. Matching.
Answers (1)
The following data were accumulated for use in reconciling the bank account of Creative Design Co. for August 20Y6: 1. Cash balance according to the company's records at August 31, $20,870. 2.
Answers (1)
New Questions in Business
Which of the following could result in the termination and liquidation of a partnership?1) Partners are incompatible and choose to cease operations. 2) There are excessive losses that are expected to continue. 3) Retirement of a partner. A. 1 onlyB.
Answers (1)
If an employer agrees to give you constructive criticism of your interview performance, you need to listen carefully and take notes. true or false
Answers (1)
If Whole Foods Market leaders were to engage in a SWOT analysis, they might study which of the following factors as part of the organization's external environment? a. Demographic and population changes within society b. The organizational culture c.
Answers (1)
How many fewer shirts are sold at the new demand level for any given price?
Answers (1)
brazil could produce coffee and rice. however, because of the climate and land of brazil, coffee is much cheaper and faster to produce.
Answers (2)
Home » Business » Braxton's Cleaning Company stock is selling for $34.75 per share based on a required returmn of 10.4 percent. What is the the next annual dividend if the growth rate in dividends is expected to be 3.9 percent indefinitely?
Sign Up Forgot Password?