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
Tequila Ley, at $ 3,500,000
Answer:
C. inefficiences may be concealed in the past performance.
Explanation:
A major drawback of using historical results for judging current performance is that inefficiences may be concealed in the past performance.
Here are the answers in order: <span>Positive, normative, positive
Positive analysis usually used to find the most efficient way to solve a problem regarding the cost (sometimes it even involve something harsh and unethical)
Normative analysis refers to what should've been done after considering ethical value
</span>
Answer:
a.
Explanation:
Based on the information provided within the question it can be said that the statement that is true from the ones provided is that Wholesome will probably be able to pass the cost on to its customers because they are less sensitive to price increases than the average buyer. Wholesome Pet Foods is a high quality provider, meaning that their products tend to be more expensive, and even still they have been incredibly successful because their clients do not mind paying more for better quality product. Therefore an increase in price will not affect their loyal customers.
