Q7. General Electric Corp. (GE) paid cash dividends totaling $0.57 per share in 2000. Over the previous three years, GE's dividends grew at an annual rate of 15.4 per-cent. Assume that this growth rate will continue for five more years, after which dividend growth will revert to a normal annual rate of 8 percent into perpetuity. Also assume that the appropriate discount rate for GE is 11 percent. a. Compute the value of GE's stock at year-end 2000. b. The actual price of GE stock at year-end 2000 was $47.9375. Comparing this price to your calculation of GE's value in (a), was GE overpriced or underpriced at year-end 2000?
In: Finance
The Consumer Price Index (CPI) is the most popular indicator of inflation. Consider the price and consumption data given below.
|
Product |
Quantity Purchased 2000 |
Price per Unit |
||
|
2000 |
2003 |
2004 |
||
|
Oranges (kg) |
5 |
$ 2.00 |
$ 2.50 |
$ 2.60 |
|
Flour (lbs) |
10 |
1.30 |
1.80 |
2.00 |
|
CD’s |
2 |
18.00 |
20.00 |
23.00 |
|
Draft Beer |
3 |
1.00 |
1.70 |
1.80 |
(a) Using 2000 as the base year compute the value of the CPI for the years 2003 and 2004 (2000 = 100).
(b) Briefly interpret your results using the CPI that you have calculated.
(c) Compute the annual inflation rate for the years 2003 and 2004.
In: Economics
An insurance company charges an annual premium of $75 for a $200,000 insurance policy against a house burning down. If the (empirical) probability that a house burns down in a given year is .0003, what is the expected value of the policy to the insurance company?
In: Statistics and Probability
A compound contains only carbon, hydrogen, and oxygen. Combustion of 21.16 mg of the compound yields 48.04 mg of CO2 and 16.4 mg of H2O. The molecular weight of the compound is 114.1g/mole. What are the empirical and molecular formulas of the compound.
In: Chemistry
"Vertical restraints can be used to increase efficiency in a market, butthey may also restrict competition." Discuss, with reference to economic theory aswell as any relevant empirical evidence.
Need response in 200-250 words.Avoid plagiarism.
In: Economics
The characteristic odor of pineapple is due to ethyl butyrate, a compound containing carbon, hydrogen, and oxygen. Combustion of 3.89 mg of ethyl butyrate produces 8.85 mg of CO2 and 3.61 mg of H2O. What is the empirical formula of the compound?
In: Chemistry
In: Statistics and Probability
In: Chemistry
Consider the set of integers A = {1, 2, 3, 4, 5}. Pairs of numbers are constructed where each number of the pair comes from set A. Construct the sampling distribution of sample ranges. Apply the Empirical Rule to this distribution.
In: Statistics and Probability
empirical research consistently documents price drops on the announcement of equity raising. a generally accepted explanation is that managers may choose to sell share when market tend to undervalue the shares. true or false and give reason for answer
In: Accounting