🏷️ LIMITED TIME OFFER: GET 20% OFF GRADE+ YEARLY SUBSCRIPTION →
Log in
Economics
1
answer
0
watching
49
views

Assume XYZ stock’s last dividend was $3. The dividend growth rate is expected to be constant at 5% for 3 years, after which dividends are expected to grow at a rate of 6% forever. XYZ’s required return (rs) is 10%.

What is XYZ’s stock price today?

Watch
1
answer
0
watching
49
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Mahe Alam
Mahe AlamLv10
28 Sep 2019

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share

Related textbook solutions

Principles of Economics
2nd Edition, 2017
Openstax
ISBN: 9781947172364
Principles of Macroeconomics
2 Edition,
Openstax
ISBN: 9781947172388
Principles of Microeconomics
2 Edition,
Openstax
ISBN: 9781947172340

Related questions

abc inc. pays dividends annually. the expected dividend payment in year five is $2. the growth rate, which is currently 10%, is expected to decline linearly over ten years, between year 5 and year 15, to a stable rate of 5% thereafter. the required return is ten percent. calculate the current stock price

1.1 The initial cost of constructing a permanent dam (i.e., a dam that is expected to last forever, a perpetuity) is $425 million. The annual net benefits will depend on the amount of rainfall: $18 million in a “dry” year, $29 million in a “wet” year, and $52 million in a “flood” year. Meteorological records indicate that over the last 100 years there have been 86 “dry” years, 12 “wet” years, and 2 “flood” years. Assume the annual benefits, measured in real dollars, begin to accrue at the end of the first year. Using the meteorological records as a basis for prediction, what are the net benefits of the dam if the real discount rate is 5 percent? Does the dam pass the net benefits test?

1.2 Use several alternative discount rate values (1% to 10%) to investigate the sensitivity of the present value of net benefits of the dam in 1.1 to the assumed value of the real discount rate. Determine the "breakeven" value of the discount rate, which can be found by solving for the rate at which the present value of the stream of expected annual net benefits just equals the cost of construction.

Ryan saved​ $50,000 last year in his bank account so that he could buy a car this year. In this​ case, money served the function of a​ ________.

A.

means of deferred payment

B.

unit of account

C.

store of value

D.

medium of exchange

A bank is said to have enough liquidity​ if:

A.

it holds deposits amounting to at least​ $100,000.

B.

it operates for seven days a week for more than 12 hours a day.

C.

it has enough funds to conduct its

dayminus−tominus−day

businesses and meet the regulatory requirements.

D.

the value of its assets exceeds the value of its liabilities by at least​ $50,000.

Consider an economy that only produces wooden chairs. In​ 2012, the economy produced 100 wooden chairs priced at​ $10 each. The nominal GDP of the economy for the year 2012 will​ be:

A.

​$10,000.

B.

​$10.

C.

​$100.

D.

​$1,000.

Hyperinflationary episodes are always related to extremely rapid growth​ of:

A.

real GDP.

B.

money supply.

C.

interest rates.

D.

money demand.

Which of the following financial organizations have the ability to influence the supply of reserves in the United​ States?

A.

The World Bank

B.

The Fed

C.

Only private commercial banks

D.

Only public sector banks

A retired worker receives a pension that is not indexed to inflation. Which of the following will happen if the rate of inflation​ rises?

A.

The retiree will be better off.

B.

The​ retiree's purchasing power will fall.

C.

The shareholders of the firm in which he worked will lose.

D.

The​ retiree's purchasing power will increase.

Assuming all else​ equal, what is likely to happen to the demand curve for reserves in an economy if it goes through a period of rapid​ expansion?

A.

There will be a n upward movement along the demand curve for reserves.

B.

The demand curve for reserves will shift to the left.

C.

There will be a downward movement along the demand curve for reserves.

D.

The demand curve for reserves will shift to the right.

If the nominal interest rate in an economy is​ 9% and the expected inflation rate is​ 6%, then the expected real interest rate in the economy​ is:

A.

​15%.

B.

​9%.

C.

​6%.

D.

​3%.

If nominal GDP​ increases, what might be the cause of this​ increase?

If nominal GDP​ increases, this could be caused​ by:

​(Select

all that

apply.​)

A.

An increase in the price level

B.

Deflation

C.

An increase in real GDP

D.

A decrease in the price level

Given the following​ information, what is the growth rate of nominal​ GDP?

Upper Y 0Y0

real GDP​ =

​$10001000

​(in millions)

Upper Y 1Y1

real GDP​ =

​$11001100

​(in millions)

Upper Y 0Y0

price level​ = 120120

Upper Y 1Y1

price level​ = 130130The growth rate of nominal GDP is

nothing ​%.

​ (Round

your answer to the nearest

hundredth.​)

According to the quantity theory of​ money, what must the growth rate of the money supply be given the following​ information?

The growth rate of real GDP is

1.01.0​%.

The growth rate of nominal GDP is

3.83.8​%.

The nominal interest rate is

7.17.1​%.

The real interest rate is

4.34.3​%.

The money supply​ (M2) is

​$10 comma 61210,612

​(in billions)According to the quantity theory of​ money, the growth rate of the money supply must be

nothing ​%.

​ (Round

your answer to the nearest

tenth.​)

According to the quantity theory of​ money, what is the inflation​ rate?

Use the information given above and calculate the inflation rate.

According to the quantity theory of​ money, the inflation rate is

nothing ​%.

​ (Round

your answer to the nearest

tenth.​)

According to the quantity theory of​ money, the inflation rate is

A.

the ratio of money supply to nominal GDP.

B.

the gap between the growth rate of money supply and the growth rate of real GDP.

C.

the gap between the nominal and real interest rates.

D.

the gap between the growth rate of money supply and the growth rate of nominal GDP.

If the inflation rate is

positivepositive​,

what must be​ true?

A.

The growth rate of nominal GDP

greater than>

the growth rate of money supply.

B.

The growth rate of real GDP

less than<

the growth rate of money supply.

C.

The growth rate of real GDP

greater than>

the growth rate of money supply.

D.

The growth rate of nominal GDP

less than<

the growth rate of money supply.

An open market operation is​ ____________.

A.

the process of selling​ Fed-issued IOUs between banks.

B.

an exchange between a private bank and the Federal Reserve where the Fed buys or sells government bonds to private banks.

C.

where a bank borrows reserves or bonds from the Federal​ Reserve's discount window.

D.

an exchange between private banks where the banks buy or sell bonds to each other.

The Federal Reserve conducts open market operations when it wants to​ ____________.

A.

change the liquidity levels of banks.

B.

influence the discount rate.

C.

influence the federal funds rate.

D.

change the level of reserves it holds for banks.

When the Fed

sellssells

government bonds

toto

private​ banks, it

▼

the electronic reserves that banks hold.

Weekly leaderboard

Home
Homework Help 3,900,000
Economics 400,000
Start filling in the gaps now
Log in