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shtirl [24]
3 years ago
15

You are considering purchasing a stock that currently sells for $48. The expected price of the stock in a year is $46, and durin

g the coming year a $5 dividend is expected to be paid. The risk-free rate is 4% and the market return is 10%. The stock has a beta of 0.9. What is the holding period return of the stock
Business
1 answer:
o-na [289]3 years ago
5 0

Answer:

Holding Period return is 6.25%

Explanation:

The return received on the asset in the period in which it is held is called holding period return. It included the interest / dividend received and change in the initial price and current price.

According to given data

Initial Price of stock = $48

Expected Value in coming year = $46

Expected Dividend =  $5

Formula for Holding Period Return

HPR = [ Income + [ ( Expected value - Initial Value ) ] / initial value

HPR = [ Expected Dividend + [ ( Expected value - Initial Value ) ] / initial value

HPR = [ $5 +  ( $46 - $48 ) ] / $48

HPR = [ $5 - $2 ] / $48

HPR = $3 / $48

HPR = 0.0625 = 6.25%

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Spencer Tools would like to offer a special product to its best customers. However, the firm wants to limit its maximum potentia
pochemuha

Answer:

b. 3,249 units

Explanation:

Step 1. Given information.

Fix costs are 32.000

Depreciation expense 9.700

Contribution margin 9.85

Step 2. Formulas needed to solve the exercise.

Break even point = Fixed cost / contribution per unit

Step 3. Calculation.

Break even point= $32.000/$9.85= 3,248.73 rounded to 3,249

Step 4. Solution.

3.249 units is the minimum number of units to ensure its potential loss does not exceed the desired level

Option B is correct i.e. 3.249 units

6 0
3 years ago
An insurance firm agrees to pay you $3,310 at the end of 20 years if you pay premiums of $100 per year at the end of each year f
azamat

Answer:

6.43%

Explanation:

The internal rate of return shall be determined by the Insurance firm using the following mentioned method:

Cash flows      Year involved      Present [email protected]%  Present [email protected]%          

($100)                 1-20                      ($851)                            ($1,487.75)                      

$3,310                 20                        $492                             $1,832.67

                                                        ($359)                           $344.92

IRR=A%+ (a/a-b)*(B%-A%)

A%=10%  a= ($359) B%=3%  b=$344.92  

IRR=10%+(-$359/-$359-$344.92)*(3%-10%)

     =6.43%

3 0
3 years ago
What is an economic factor on a business
blsea [12.9K]

Hi there!

<u>Information:</u>

<u>First, allow us to observe what an "economic factor is".</u>

- An economic factor is data taken out of market and economy.

- Economic factor may include certain costs. And these costs well be in our answer.

<u>Problem-Solving / Answer</u>

<u>Now, we figure out what economic factors we can find.</u>

<u>Tax rates</u> - tax rates can include an Economic factor.

<u>Laws</u> - Laws are a known economic factor.

<u>Unemployment</u> - Big one, at this time due to COVID-19, unemployment rates are flying off the charts. This is an example of an economic factor.

Important Keywords;

- Data ; <u>Data can be information taken from a place, for example, you have taken data from a chart.</u>

<u>Learn more:</u>

<u>Push factors: brainly.com/question/13553564</u>

<u>Economic growth: brainly.com/question/13023127</u>

<u></u>

<u />

8 0
4 years ago
On April 5, Fenning Corporation, a wholesaler of hydraulic lifts, acquired land in exchange for 30,000 shares of $80 par common
gulaghasi [49]

Answer:

Land A/c Dr $3,360,000

   To Common stock A/c  $2,400,000

   To Additional paid in capital - in excess of par - common stock A/c $960,000

(Being the exchange transaction is recorded)

Explanation:

The journal entry is shown below:

Land A/c Dr $3,360,000

   To Common stock A/c  $2,400,000

   To Additional paid in capital - in excess of par - common stock A/c $960,000

(Being the exchange transaction is recorded)

The computation is shown below:

For land

= 30,000 shares × $112

= $3,360,000

For Common stock

= 30,000 shares × $80

= $2,4000,000

And, the remaining balance is credited to the additional paid in capital account

4 0
3 years ago
Which dimension of e-commerce technology describes the fact that the internet is available at work, at home, and elsewhere via d
Vikentia [17]

Ubiquity is the dimension of e-commerce technology describes the fact that the internet is available at work, at home, and elsewhere via desktop and mobile services.

The definition of technology is the application of scientific knowledge to practical purposes or applications. Technology takes scientific principles and applies them to transform the environment in which we live. Technology can also use scientific principles to advance industry and other human constructs.

Technology is the way scientific knowledge is applied to practical purposes. It includes not only machines (such as computers), but also technologies and processes (such as how computer chips are made). All technology may seem electronic only, but that's just the latest technology.

Learn more about technology here:brainly.com/question/25110079
#SPJ4

5 0
2 years ago
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