Take Time Corporation will pay a dividend of $4.55 per share next year. The company pledges to increase its dividend by 6.5 percent per year, indefinitely. If you require a return of 9 percent on your investment, how much will you pay for the company’s stock today? (Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.) Current stock price $

The correct answer is $182.

Explanation:

According to the scenario, the given data are as follows:

Dividend = $4.55

Growth rate = 6.5%

Required rate of return = 9%

So, we can calculate the current stock price by using the following formula:

Current stock price  = Dividend ÷ ( Required rate of return - Growth rate)

By putting the value, we get

Current stock price = $4.55 ÷ ( 9% - 6.5% )

= $4.55 ÷ 0.025

= $182

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know

answer; sales of books;