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daser333 [38]
3 years ago
14

The expected rate of return for a stock whose next dividend is "DIV1", that has a required rate of return "r" and expects to gro

w its future dividends at a rate of "g" is ________. r = g r = DIV1/P0 r = DIV1 + P0/g r = (DIV1/P0) + g
Business
1 answer:
Tema [17]3 years ago
6 0

Answer:

The correct answer is r=(DIV1/P0)+g

Explanation:

The expected rate of return for a stock is usually the dividend yield  added to capital gains yield.

Dividend yield is the percentage of the share's price that the company pays to shareholders as dividends and the formula is the dividends divided by the share price, hence in this scenario it DIV1/PO

On other hand,capital gains yield is the percentage increase of the share price over time. In other words, the share price growth rate,which is a market expectation of the company's performance.The g given in the question depicted this.

Without mincing words,the expected rate of return on the stock is dividends yield(DIV1/P0) plus the capital gains yield(g)

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You are considering investing $1,000 in a complete portfolio. The complete portfolio is composed of Treasury bills that pay 5% a
astra-53 [7]

Answer:

amount to be investment in risky portfolio =  $405

amount invest in security x = $243

amount invested in security Y = $162

Explanation:

given data

investing = $1,000

Treasury bills = 5%

optimal weights of X = 60 %

optimal weights of Y = 40 %

expected rate of return x =  14%

expected rate of return y = 10%

solution

we know that

                      weight                     return                     return from risky port

X                     60 %                         14 %                       8.4 %

Y                     40 %                          10 %                       4%

total                                                                                 12.4 %

so here

return from risky portfolio is = 12.4 %

and

return from risk free investment = 5 %

so 'we consider here investment in risky portfolio = x

so investment in risk free  = 1 - x

so we can say that

12.4 % × x + 5 % × (1-x) = 8 %

solve we get

x = 0.405

so investment in risky portfolio = 0.405

so investment in risk free  =0.595

and

amount to be investment in risky portfolio = $1000 × 0.405

amount to be investment in risky portfolio =  $405

and

amount invest in security x = $405 × 60%

amount invest in security x = $243

and

amount invested in security Y = $405 × 60%

amount invested in security Y = $162

4 0
3 years ago
Firm A has fixed operating costs of $100,000, variable operating costs per unit of $8 and a selling price of $20 per unit. Inter
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Explanation:

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3 years ago
Property rights are important to a free enterprise system because they
Morgarella [4.7K]

Answer:

cause ppl to have gang wars

Explanation:

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3 years ago
Read 2 more answers
For each of the following fiscal policy proposals, determine whether the primary focus is on aggregate demand, aggregate supply,
Bad White [126]

Answer:

2. (i) demand-side; (ii) both; (iii) supply-side; (iv) supply-side; (v) both

Explanation:

a. $1,000 per person tax reduction  ⇒ focus on aggregate demand (more money for consumers to spend)

b. a 5% reduction in all tax rates  ⇒ focus on both aggregate demand and supply (more money for consumers and suppliers)

c. Pell Grants, which are government subsidies for college education  ⇒ focus on aggregate supply (more money for suppliers of college education)

d. government-sponsored prizes for new scientific discoveries ⇒ focus on aggregate supply (more money for suppliers of new scientific discoveries)

e. an increase in unemployment compensation  ⇒ focus on both aggregate demand and supply (more money for consumers resulting in higher prices and lower output)

4 0
3 years ago
The ledger of Shamrock, Inc. on March 31, 2017, includes the following selected accounts before adjusting entries.
romanna [79]

Answer and Explanation:

The adjusting entries are as follows:

1 Insurance expense Dr $310

           To Prepaid Insurance  $310

(Being insurance expense is recorded)  

2 Supplies expense Dr $1,650 ($2,610 - $960)

           To Supplies $1,650

(Being supplies expense is recorded)  

3 Depreciation expense Dr $150

           To Accumulated Depreciation - Equipment $150

(Being depreciation expense is recorded)  

4 Unearned service revenue Dr (two-fifth of $12,000) $4,800

           To Service Revenue $4,800

(Being service revenue is recorded)

3 0
2 years ago
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