Apollo Utilities, Incorporated paid a dividend of $2.12 yesterday (D0 = $2.12). If this dividend is expected to grow at a constant rate of 6% per year for the next 10 years and shareholders of Apollo use a required rate of return of 11%, what will the expected dividend be in year 10 (D10 = ? )? (a) $ 6.02 (b) $ 3.79 (c) $42.40 (d) $ 3.45 (e) $44.94

(b) $ 3.79

Explanation:

This can be calculated using the following simple formula:

Current dividend = (1 + Growth rate) × Previous dividend.

The formula in the following table:

Year   1 + Growth rate   Previous dividend ($)   Current Dividend ($)  

0             -                                 -                                       2.120  

1          1.060                                2.120                            2.247  

2         1.060                                2.247                            2.382  

3         1.060                                 2.382                           2.525  

4          1.060                                2.525                           2.676  

5          1.060                                2.676                           2.837  

6          1.060                                 2.837                           3.007  

7          1.060                                 3.007                           3.188  

8          1.060                                 3.188                            3.379  

9          1.060                                 3.379                           3.582  

10         1.060                                 3.582                           3.797

Therefore, D10 is equal to 3.797.

answer///parietal;

the answer is "b.the increased supply will create a surplus. "

the essential thought behind price controls is straightforward - utilize the power of law to modify the equilibrium of a market. for instance, the legislature may choose that the steel business needs to survive, and in this way pass a law to set a value floor on steel. this implies all steel sold must offer at or over the floor value, which must be set over the equilibrium cost for it to have any impact. the switch could likewise happen - the administration can choose that steel is excessively costly and set a value roof underneath its equilibrium value, with the goal that all steel must be sold at or beneath that ceiling.