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loris [4]
3 years ago
13

The required rate of return on the stock of Knight Titles is 8%. Its expected ROE is 10% and its expected earnings per share thi

s year is $6.00. If the firm's plowback rate (b) is 40%, its P/E ratio will be _______.a.None of the aboveb.8.33c.15d.14.29
Business
1 answer:
tensa zangetsu [6.8K]3 years ago
4 0

Answer:                   Ke = 8% = 0.08  

                              ROE = 10% = 0.10

             Expected EPS = $6

      Plowback rate ( b)  = 40% = 0.40

 Dividend per share (D) =  60%x $6 = $3.60

                                   Po =  D(1+g )/ke-g              

                                   Po = $3.6(1+0.04)/0.08-0.04

                                   Po = $3.744/0.04

                                   Po = $93.60

The current market price is $93.60

The price-earnings ratio = market price per share/Earnings per share

                                          = $93.6/$6

                                           = 15.6

The correct answer is C

Explanation: The price-earnings ratio is the ratio of market  price per share to earnings per share. In this scenario, it is important to obtain the market price per share using the above formula. Thereafter, the market price per share is divided by the earnings per share. There is need to calculate the dividend per share based on the retention rate of 40%. since the retention rate is 40%, the dividend pay-out rate will be 60%. Thus, dividend is 60% of the expected earnings per share. The estimation of growth rate (g) is based on Gordon's growth model, which is g = r x b. r represents return on equity while b denotes the plowback(retention rate).                

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In the economy of​ Cycladia, the total unemployment rate is equal to 11.0 ​percent, the structural unemployment rate is 2.42.4 ​
damaskus [11]

Answer:

The cyclical unemployment rate is 4.2%

Explanation:

There is a natural unemployment rate which contains every unemployment rate which is cyclical unemployment plus structural unemployment plus frictional unemployment, so then in order to get cyclical unemployment we will use the below formula:

natural unemployment = Frictional unemployment + Cyclical unemployment +structural unemployment

therefore we are given the natural unemployment rate of 11%

Frictional Unemployment Rate of 4.4%

Structural unemployment rate of 2.4%

then we substitute on the above mentioned formula and solve for cyclical unemployment

11% =4.4% + Cyclical Unemployment Rate+ 2.4% then we transpose and solve for cyclical unemployment rate

11% - 4.4% -2.4% = Cyclical Unemployment Rate

4.2 % = Cyclical unemployment rate

this unemployment rate goes with the business cycle of any business in which if there is a recession in an economy it is accounted for even if there is economic growth it is accounted for.

4 0
4 years ago
Communication with the public and employees should be overseen by the director of PR. The duties of the crisis team should be di
Veseljchak [2.6K]

Answer: The third option (option C) is the right answer.

Explanation:

The paragraph which has the best coherence is option C. This is because in the case of the third option, it explains that the flow of ideas is constant from one sentence to another.

The first sentence serves as an introduction which talked about the reasons why duties should be divided based on each member’s expertise. The sentences moved smoothly and also logically from one sentence to another sentence. An example is the sentence that “if your company does not have a public relations executive…..”. This should logically proceed the sentence that says that communication ought to be overseen by the director of PR.

This shows that the third option possesses a consistent and logical train of thought as well.

3 0
3 years ago
An example of filtering would be when a manager gives a subordinate an unwarranted compliment instead of honest criticism. worke
SpyIntel [72]

Answer:

Manager gives a subordinate an unwarranted compliment instead of honest criticism.

Explanation:

Filtering is when the sender manipulates the information so its received more favorably. A compliment instead of an honest critique is an example of this. It doesn't help the employee improve.

6 0
3 years ago
You are an economic advisor to the president. You observe a decrease in gross investment. Assume the economy was operating at th
melomori [17]

Answer:

a. Increase in Net Exports, Increase in AD, real GDP will stay same

b. Excess Demand

c. Appropriate Contractionary Fiscal Policy : decrease tax & or increase government expenditure

d. Actions smooth business cycle by brining actual real GDP towards full employment

Explanation:

Aggregate Demand is the total value of goods & services all the sectors of an economy are planning to buy during a given period of time

Aggregate Demand [AD] = Consumption [C] + Investment [I] + Government Expenditure [G] + Net Exports [NX = Exports (X) - Imports (M)]

Aggregate Demand > Aggregate Supply at full employment level is Excess Demand. Aggregate Demand < Aggregate Supply at full employment level is Deficit Demand

Decrease in Investment leads to fall in Aggregate Demand. It creates Deficit Demand & decreases real GDP. It can be corrected through demand expansionary fiscal policy of decreasing taxes & increasing govt. expenditure.

Increase in exports leads to increase in net exports & in turn increase in aggregate demand. This causes Excess demand problem & real GDP will remain same (economy already at full equilibrium, GDP cant be increased more). Appropriate Fiscal Policy [Contractionary Fiscal Policy] includes decreasing taxes & or increasing govt. purchase.

These actions will smooth out business cycle by bringing actual real GDP back to full employment level.

5 0
3 years ago
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DaniilM [7]
I don't know. There are no answer options. Maybe palm trees etc.?
3 0
3 years ago
Read 2 more answers
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