Answer:
$29.70
Explanation:
Retention ratio = 1 - payout ratio
= ( 1 -0.5 )
= 0.5
Growth rate, g = ROE × Retention ratio
= 0.15 × 0.5
= 0.075
= 7.5%
Required return = Risk - free rate + [ Beta × (Market rate- risk-free rate) ]
= 2.5% + 1.44 × (11% - 2.5%)
= 14.74%
Intrinsic value =
=
= 29.69 ≈ $29.70
Answer:
Average annual rate of return = 4.3%
Explanation:
<em>The return on a stock is the sum of the capital gains(loss) plus the dividends earned.
</em>
<em>Capital gain is the difference between he value of the stocks when sold and the cost of the shares when purchased.
</em>
<em>Total shareholders Return = </em>
<em>(Capital gain/ loss + dividend )/purchase price × 100</em>
So we can apply this to the formula:
Total dividend earned= (1.37 × 100) + ($1.55 × 100) + ($1.66× 100)+ ($1.74 × 100) +($1.85 ×100) = 817
Capital gain= (84.76-76.63)*100 = 813
Total return (%) = (813+817)/(76.63*100) × 100= 21.3%
Average Annual return = Return over investment period /Number of years
= 21.3/5 = 4.3%
Average annual rate of return = 4.3%
Answer:
The quantity demanded by consumers decreases as prices rise, then increases as prices fall.
Explanation:
Demand refers to the quantity of products and services that consumers are willing and able to buys at a specific price. A customer must afford to pay and is ready to buy the product or service for it to be considered to be in demand.
According to the law of demand, there is an inverse relationship between demand and the price of a product. Should the price increase, demand moves in the opposite direction. A decrease in price will lead to a rise in demand. Customers will afford a larger quantity than before. Potential customers who could not afford the product can now buy it, thereby increasing demand.
The right answer for the question that is being asked and shown above is that: "a. shareholders." According to the agency problem, shareholders represent the principals of a corporation. They have to represent the whole company as a whole.