Answer: 0.9
Explanation:
The Expected Return on an investment can be calculated using the Dividend Discount Model as it is a key component in thw formula which is,
P = D1 / r - g
where,
D1 is the dividend paid next year
P is the current stock price
g is the growth rate
r is the expected return
With the given figures we have,
84 = 4.20 / r - 0.08
84 ( r - 0.08) = 4.20
r - 0.08 = 4.20/84
r = 4.20/84 + 0.08
r = 0.13
The Expected Return can be slotted into the CAPM formula to find the beta.
The CAPM formula calculates the Expected Return in the following manner,
Er = Rf + b( Rm - rF)
Where,
Er is expected return
Rf is the risk free rate
Rm is the market return
b is beta
Slotting in the figures gives,
0.13 = 0.04 + b( 0.14 - 0.04)
0.13 = 0.04 + b (0.1)
0.13 - 0.04 = 0.1b
b = 0.09/0.1
b = 0.9
Using the constant-growth DDM and the CAPM, the beta of the stock is 0.9
Answer:
B. The physical count of securities and cash
Explanation:
An objective is the business's goal and in order to see that the quantity would need to be in a physical sense to see growth over time.
It should generate another major event around 2050-2060
Answer:
Return on investment = -0.71%
Explanation:
<em>The return on investment is the sum of the dividends earned and capital gains made during the holding period of the investment. </em>
<em>Dividend is the proportion of the profit made by a company which is paid to shareholders. </em>
<em>Capital gains is another type of the return made on an equity investment as a result of increase in the value of the shares. It is difference between the cost of the share and the value at the time of disposal</em>.
Therefore, we can can compute the return on the investment as follows:
Total Return on investment =
(Capital gain/ loss + dividend )/purchase price × 100
Capital loss = (184 -140) × 120 = - 480
Dividend = 427
Commission = 34 + 39 =-73
Net loss on investment = - 480 - 73 + 427= -126
Return on investment = -126
/(148× 120) = -0.71%
Return on investment = -0.71%
