Microeconomics: Private and Public Choice (MindTap Course List)
15th Edition
ISBN: 9781285453569
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter ST3, Problem 3CQ
To determine
Reason for the willingness of people to pay a higher price even if they might not get dividends for many year.
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Suppose that you have bought a total of 3400 shares of stock of a particular company. You bought 1300 shares of stock at $17 per share, 1000 shares of stock at $12 per share, and the remaining shares at $22 per share. What is the average price you paid per share of stock? (please round your answer to 2 decimal places)
TSC, Inc. sells for $23 and pays an annual per share dividend of $2.50, which you expect to grow at 7 percent. What is your expected return on this stock? What would be the expected return if the price were $40 a share? Round your answer to the two decimal places.
If a firm earns $375 billion in profits for the year and they retain $218 billion, how much do they pay in dividends?
Chapter ST3 Solutions
Microeconomics: Private and Public Choice (MindTap Course List)
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- Question 2 of 10. Paul owns 100 shares of stock in an S corporation which he purchased for $57 per share. He gave 10 shares to his daughter, Julie. He also sold 10 shares to his friend, Bill, for $65 a share. What are Paul, Julie, and Bill's respective bases after those transactions? Paul: $4,560Julie: $570Bill: $570 Paul: $4,560Julie: $570Bill: $650 Paul: $5,700Julie: $570Bill: $570 Paul: $5,700Julie: $570Bill: $650arrow_forwardIf you owned a small firm that had become somewhat established, but you needed a surge of financial capital to carry out a major expansion, would you prefer to raise the funds through borrowing or by issuing stock? Explain your choice.arrow_forwardIf a firm earns $500 million in profits for the year and they retain $175 million, how much do they pay in dividends?arrow_forward
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