Is a relatively new firm that appears to be on the road to great success. The company paid its first annual dividend yesterday in the amount of $.28 a share. The company plans to double each annual dividend payment for the next three years. After that time, it is planning on paying a constant $1.50 per share indefinitely. What is one share of this stock worth today if the market rate of return on similar securities is 11.5%?

The price of the stock today is $12.43

Explanation:

The price of the share today can be calculated using the DDM approach whereby discount the expected future cashflows by the required rate of return and calculating the perpetuity value or terminal value where the growth becomes zero.

The price of the Stock today is,

P0 = 0.28 * (1+1) / (1+0.115)  +  0.28 * (1+1)² / (1+0.115)²  +  0.28 * (1+1)³ / (1+0.115)³  + [(1.5 / 0.115) / (1+0.115)³]

P0 = $12.428 rounded off to $12.43

hi,

henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi

107x106 is the answer