Apply the profit for future growth impact the stock price

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Reference no: EM131979420

1. By paying out a dividend, a company has that much less to continue its growth. From the investors standpoint, it can depend on individual preference on which is better: getting a dividend distribution that gives profit, or having the company reinvest all profits for future growth (even if that growth is currently slow) in the effort to continue to raise the stock price. Can the decision to apply the profit for future growth impact the stock price??

2. An? amount, P, must be invested now to allow withdrawals of ?$900 per year for the next 15 years and to permit $350 to be withdrawn starting at the end of year 5 and continuing over the remainder of the 15?-year period as the $350increases by 5?% per year thereafter. That? is, the withdrawal at EOY six will be $367.50?, $385.88 at EOY seven?,and so forth for the remaining years. The interest rate is 10?% per year. What is the P amount?

Reference no: EM131979420

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