Answer: 12.6 %
Explanation: The rate of growth that a company expects to maintain for a long term is called sustainable growth rate. It is denoted by G. Sustainable
growth rate helps the analysts to determine at what stage the company is in its life cycle.
.
FORMULA :-
GROWTH = Retention ratio * return on equity
= ( 1 - Dividend payout ratio) * return on equity
= 0.9 * 0.14
= 12.6 %
Answer: Option D
Explanation: In simple words, co- marketing refers to the process in which two firms of an industry, who serves the same audience, combines ther resources for increasing their scale of operations with the ultimate goal of increasing profits.
Generally such arrangements do not happen between two major competitors in an industry. This is more common in international businesses where one firm has technology and other has customer base.
Hence from the above we can conclude that the correct option is D .
Answer:
6.20000%
Explanation:
The computation of the unlevered cost of capital is shown below;
Asset beta is
= (Debt × Debt beta + Equity × Equity beta) ÷ (Debt + Equity)
= (75 × 0.20 + 300 × 0.75) ÷ (75 + 300)
= 0.6400000
Now
Unlevered cost of capital is
= risk free rate + asset beta × market risk premium
= 3% + 0.6400000 × 5%
= 6.20000%