The Starr Co. just paid a dividend of $1.85 per share on its stock. The dividends are expected to grow at a constant rate of 4 percent per year, indefinitely. Investors require a return of 12 percent on the stock. What is the current price?

What will be the price in three years?
What will be the price in 14 years?

Explanation:

Last dividend = $1.85 (D0)

growth rate = 4% (g)

Current year dividend (D1) = 1.85*(1+0.04) = $1.924

r = 12%

Current price = D1/(r-g) = 1.924/(0.12-0.04) = 24.05

Price in 3 years = D4/(r-g) = D0*(1+g)^4/(r-g) = 1.85*1.04^4/0.08 = $27.0529792

Price in 14 years = D14/(r-g) = D0*(1+g)^15/(r-g) = 1.85*1.04^15/0.08 = $41.647

bd = 9 cm

step-by-step explanation:

in a 30°-60°-90° triangle, the ratio of side lengths is 1 : √3 : 2. that is, the longest side (hypotenuse) is twice the length of the shortest side.

all of the triangles in your geometry are 30°-60°-90° triangles. ac is the hypotenuse of δacd, and the short side of δabc.

the short side ad of δacd will be half the length of ac, so 3 cm. the hypotenuse ab of δabc will be twice the length of ac, so 12 cm. segment bd is the difference of the lengths ab and ad, so is

bd = ab -ad

bd = 12 cm - 3 cm = 9 cm

comment on side length ratios

you can figure the ratios of side lengths in a 30°-60°-90° triangle by considering the trig ratios of the angles. or you can figure the length of the altitude of an equilateral triangle of side length 2 using the pythagorean theorem.

the correct choice is a