1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
kogti [31]
2 years ago
11

A share of BAC common stock has just paid a dividend of $1.00. The market return is 12% and the beta is 1.5. The three month T-b

ill rate is 4%. The expected long-run growth rate for this stock is 8 percent. (Keep your answer to only two decimals) a. What is the required return for the stock ? (hint: CAPM) (Example of the answer format: 55.55% ) b. What is the stock price? (Example of the answer format: $55.55))
Business
1 answer:
myrzilka [38]2 years ago
5 0

Answer:

a. 16.00%

b. $13.50

Explanation:

a. The computation of the required return is shown below:

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

= 4% + 1.5 × (12% - 4%)

= 4% + 1.5 × 8%

= 4% + 12

= 16.00%

b. Now the stock price is

= Current year dividend ÷ (Required rate of return - growth rate)

= ($1 × 1.08) ÷ (16% - 8%)

= 1.08 ÷ 8%

= $13.50

We simply applied the above formulas

You might be interested in
Sheen Co. manufacturers laser printers. It has outlined the following overhead cost drivers: Overhead Costs Pool Cost Driver Ove
mylen [45]

Answer:

$200

Explanation:

As for the information provided,

Quality control rate = \frac{72,000}{1,200} =\ $60 per hour

Machine operation = \frac{150,000}{1,500} =\ $100 per hour

Material Handling = \frac{1,200}{30} =\ $40\ per batch

Miscellaneous Overhead = $\frac{57,000}{5,700} =\ $10 per hour

The order of 1,000 laser printers

Require:

Quality control cost = $60 \times 265 = $15,900

Machine operation = $100 \times 225 = $22,500

Material Handling = $40 \times 5 = $200

Miscellaneous Overheads = $10 \times 740 = $7,400

Therefore, correct option is:

$200

0 0
3 years ago
Public relations is best considered a __________ function
bonufazy [111]
Happy to help!

The correct statement includes the word: management.
Public relations is best considered a management function.

I hope I have successfully assisted you. Let me know if you have any questions!
~Brooke❤️
4 0
2 years ago
The demand for salt is inelastic, and the supply of salt is elastic. The demand for caviar is elastic, and the supply of caviar
stellarik [79]

Answer:

<h2>In the case of the salt,the salt buyers would bear most of the tax burden and for caviar,the sellers would bear most of the tax burden.Hence,the correct answer is option b. or buyers of salt and the sellers of caviar.</h2><h2 />

Explanation:

In the case of salt,the supply is more elastic than the demand which implies that the salt sellers are relatively more responsive to salt price change in the market.Therefore,if any tax is imposed on them,it would basically translate into higher production cost for the sellers and due to price elasticity of supply,the sellers would pass the tax to the salt consumers who are comparatively less price sensitive.Now,since the consumer demand for salt is inelastic and the consumers are relatively price insensitive,the consumers won't perhaps mind paying a higher market price for salt including the extra tax.Hence,in this instance,the tax burden would fall on the salt buyers or consumers.

On the other hand,based on the same line of argument,the tax burden would fall on the sellers of caviars as the price elasticity of caviar supply is less than that of the caviar demand.In this case,the caviar sellers are less sensitive about changes in market price of caviars and thus,won't mind paying a relatively higher production cost/expense which is inclusive of the tax burden.Due to higher price elasticity of demand or price responsiveness,the cavier consumers would be reluctant to bear the tax burden and pass it onto the sellers.

8 0
3 years ago
What occurs when the goods available are too few to satisfy individuals desire
LekaFEV [45]

Answer: Two elements in scarcity

Explanation: 1. Our wants 2. Our wants to fulfilling our wants.

Sorry if this wasn't the answer that u were looking for.

8 0
3 years ago
What does the regulation discussed in this section protect?
PtichkaEL [24]

Answer: May you give more details? It’s really hard to explain without no details.

Explanation:

.

4 0
3 years ago
Other questions:
  • cathy's customer base is 2/3 residential and 1/3 business . if she has 350 residential customers, how many total customers does
    5·1 answer
  • One year ago, you purchased a stock at a price of $32 a share. Today, you sold the stock and realized a total return of 14.62 pe
    14·1 answer
  • If congress and the president decide an expansionary fiscal policy is​ necessary, what changes should they make in government sp
    14·1 answer
  • On May 1, 2015, Pinkley Company sells office furniture for $300,000 cash. The office furniture originally cost $750,000 when pur
    12·1 answer
  • Which of these phrases is call to action
    11·1 answer
  • In the previous year, a firm failed to record premium amortization of $40,800 and $28,300, respectively, on its bonds payable an
    14·1 answer
  • A company is considering an investment project that would cost $8 million today and yield a payoff of $10 million in 5 years.
    8·1 answer
  • The stages of formation of the Psalter may be compared to a(n) _______ .
    11·1 answer
  • Which balanced scorecard perspective helps top management focus on what the organization must excel at to effectively meet its f
    6·1 answer
  • In reviewing the purchase request package, you should ensure finding is available and?
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!