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Answer:
Explanation:
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NEW QUESTION: 1
A stock has an expected dividend growth rate of 4.9%. The firm has just paid a dividend of $2.5 per share.
With a required rate of return of 10%, the stock is trading at $42.8. The stock is:
A. insufficient information.
B. overpriced.
C. under-priced.
D. fairly priced.
Answer: C
Explanation:
Explanation/Reference:
Explanation:
The fair price of the stock with a required rate of return, r and a dividend growth rate, g, is given by P = D1/ (r-g), where D1 = Do*(1-g) = dividend to be paid next year. In this case, the fair price of the stock equals
2.5*1.049/(10% - 4.9%) = $51.42. Thus, the stock is under-priced by $(51.42 - 42.8) = $8.62.
NEW QUESTION: 2
Drag and drop each description on the left to the appropriate business motivational model on the right.
Answer:
Explanation:
NEW QUESTION: 3
A company that provides a cloud-based storage solution for consumers needs to ensure that users' data is encrypted while it is stored on its premises. Which of the following should be used to accomplish this task?
A. SHA
B. SSL
C. RC4
D. HMAC
Answer: B