year forever (g = −5%). If the company is in equilibrium and its expected and required rate of return is 15%, which of the following statements is CORRECT?a. The company”s dividend yield 5 years from now is expected to be 10%.b. The constant growth model cannot be used because the growth rate is negative.c. The company”s expected capital gains yield is 5%.d. The company”s expected stock price at the beginning of next year is $9.50.e. The company”s current stock price is $20.
You are watching: A stock is expected to pay a year-end dividend of $2.00
Option (D) is correct.
Stock is expected to pay a year-end dividend, D1 = $2.00
Dividend is expected to decline at a rate, g = 5% a year (g = −5%)
Required rate of return = 15%
Expected stock price at the beginning of the next year:
Therefore, the company”s expected stock price at the beginning of next year is $9.50.
Total fixed costs for Green Planes Inc. are $150,000. Total costs, including both fixed and variable, are $600,000 if 140,0
The correct jonathanlewisforcongress.com is C.
Giving the following information:
Total fixed costs for Green Planes Inc. are $150,000. Total costs, including both fixed and variable, are $600,000 if 140,000 units are produced.
First, we need to calculate the unitary variable cost:
Unitary variable cost= (total cost – fixed cost) / number on units
Unitary variable cost= (600,000 – 150,000)/ 140,000= $3.21 per unit
Now, we can calculate the total variable cost for 230,000 units:
Total variable cost= 3.21*230,000= $738,300
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