Answer:
$12
Explanation:
The computation of the value of the share is shown below:
Value of the share is
= Dividend ÷ (Required rate of return - shrinking rate)
where,
The Dividend is $3
The Required rate of return is 15%
And the shrinking rate is 10%
Now placing these values to the above formula
= $3 ÷ (15% - (-10%)
= $3 ÷ 25%
= $12
Answer:
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<span>In
the cash flow statement whether the direct or indirect method is used, it
depends on the nature of business. If the company is into buying and selling
(trading) of land, the cash purchase of land can form part of the Operating
Activities. If it is otherwise, the cash purchase of land should be included in
the Investing Activities section. </span>
Answer:
The expected rate of return in the market 13.29%.
Explanation:
The expected rate of return on a stock is 16.48%.
The stock has a beta of 1.33.
The yield from treasury bill is 3.65%. Since treasury bills are risk free we will consider this risk free rate of return.
The inflation rate is 2.95%.
Expected return on stock=risk free rate+beta(market return-risk free rate)
16.48% = 3.65% + 1.33 (market return - 3.65% )
16.48% - 3.65% = 1.33 ( market return - 3.65% )
12.83% = 1.33( market return - 3.65% )
Market return - 3.65% = 
Market return - 3.65% = 9.64%
Market return = 9.64% + 3.65%
Market return = 13.29%