Answer:
The best estimate of the company’s cost of equity is 11.99%.
Explanation:
CAPM based required return = 5% + 1.1*7%
= 12.7%
Dividend model required return
35 = (1.40*1.07)/(r - 0.07)
r - 0.07 = 0.0428
r = 11.28%
The best estimate of the company’s cost of equity is the mean of two = (12.7% + 11.28%)/2
= 11.99%
Therefore, The best estimate of the company’s cost of equity is 11.99%.
Answer:
33.33%
Explanation:
Given:
Sales revenue = $360,000
Cost of goods sold = $240,000
Net income = $53,000
Now,
the gross profit = Sales revenue - Cost of goods sold
or
The gross profit = $360,000 - $240,000 = $120,000
Thus,
the company's gross profit ratio = 
or
The company's gross profit ratio = 
or
The company's gross profit ratio = 33.33%
Answer:
Its price on June 3, 2020 is $90.70.
Explanation:
The price of the Bond is its Present Value (PV) .
You need to determine first the number of years between June 3, 2020 and October 31, 2035. Draw a timeline to be accurate. There are 16 years and 5 months.
Next, we can calculate the price using time value of money techniques.
N = 16.4
PMT = $100 × 5.00% = $5
P/Yr = 1
FV = $100
IRR = 5.90%
PV = ?
Using a Financial calculator to input the values as above, the price of Bond on June 3, 2020 is $90.70.
Answer:
the risk free rate of return is 4.8%
Explanation:
The computation of the risk free rate of return is shown below:
As we know that
Expected rate of return = Risk free rate of return + beta × (market rate of return - risk free rate of return)
Here we assume the risk free rate of return be x
So ,
16.35% = x + 1.5 × (12.5% - x)
16.35% = x + 18.75% - 1.5x
16.35% - 18.75% = -0.5x
x = 4.8%
Hence, the risk free rate of return is 4.8%
Answer:
d
Explanation:
the amount by which the price of wheat falls will be smaller the lower the income elasticity of wheat. So, that´s why the income elasticity of wheat is for.
