Question 3

docx

School

J B College *

*We aren’t endorsed by this school

Course

1249

Subject

Finance

Date

Nov 24, 2024

Type

docx

Pages

1

Uploaded by 19shyamalkaushik

Report
Your inquiry: 12. Uptown Attire just delivered $1.50 as its yearly profit and builds its profit by 2.5 percent every year. What will Uptown's stock cost be in decade at a rebate pace of 12.25 percent? Assuming that Important SHOW Mini-computer STEPS Reply To compute the stock cost of Uptown Apparel in decade, you can utilize the Gordon Development Model (otherwise called the Gordon-Shapiro Model or the Profit Markdown Model). The recipe for this model is as per the following: P=D/(r-g) Where: P = Stock Cost D = Profit anticipated one year from this point (the following year's profit) r = Required Pace of Return (markdown rate) g = Profit Development Rate For this situation, you are given: D = $1.50 (the ongoing profit) r = 12.25% (markdown rate) g = 2.5% (profit development rate) Presently, plug these qualities into the equation to work out the stock cost in decade: P= 1.50/(0.1225−0.025) P=1.50/0.0975 Presently, play out the division: P=15.38 In this way, the assessed stock cost of Uptown Dress in decade, expecting a 2.5 percent yearly profit development rate and a rebate pace of 12.25 percent, would be roughly $15.38.
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