Answer:
the increase resulting from this merger = 256
Explanation:
before the merger, both Fiat and Case's contribution to Herfindahl-Hirschman index = 16² + 8² = 320
after the merger, Fiat and Case's contribution to Herfindahl-Hirschman index = 24² = 576
the increase resulting from this merger = 576 - 320 = 256
Answer:
$5.23
Explanation:
The computation of the recent dividend per share is shown below:
Price of the stock = Dividend per share × (1 + growth rate) ÷ (Required rate of return - growth rate)
$79 = Dividend per share × (1 + 2.8%) ÷ (9.6% - 2.8%)
$79 = Dividend per share × (1 + 2.8%) ÷ 6.8%
So after solving this,
The recent dividend per share is $5.23
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Answer:
The beta coefficient for Stock L that is consistent with equilibrium
Explanation:
According to Capital Asset Pricing Model, the formula to compute expected rate of return is equals to
Expected rate of return = Risk free rate of return + Beta × (Market risk - risk free rate of return)
where,
rRF = risk free rate of return
rM = market risk
Stock L that is consistent with equilibrium is expected rate of return which equals to = 9.25%
So,
9.25% = 3.6% + Beta × (8.5% - 3.6%)
9.25% = 3.6% + 4.9% Beta
9.25% - 3.6% = 4.9% Beta
5.65% = 4.9% Beta
Beta = 5.65% ÷ 4.9% = 1.15
Hence, the beta coefficient for Stock L that is consistent with equilibrium is 1.15