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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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4 0
4 years ago
An automobile factory in Michigan uses $100,000 worth of parts purchased from foreign countries along with U.S. inputs to produc
Gnom [1K]

Answer:

Total value added to the GDP is $500,000.

Explanation:

Given that,

Automobile factory uses parts that are purchased from foreign countries = $100,000

Total cars produce = 30

Price of each car = $20,000

Total cars sold = 20

Left in inventory = 10

Therefore,

Addition to GDP:

= Total value of car produced - Imports(parts purchased from foreign countries)

= (Selling price of each car × Total cars produced) - $100,000

= ($20,000 × 30) - $100,000

= $600,000 - $100,000

= $500,000

Hence, total value added to the GDP is $500,000.

5 0
4 years ago
In one of the case studies in the textbook, Albert Miano, the facilities supervisor for a popular magazine, submitted phony invo
olga nikolaevna [1]

<u>Answer: </u>Option B

<u>Explanation:</u>

In this case Alber Miano had created replica of the invoices and has forged the contractor's signature. The hours of the trade contractors work was changed slightly. Due to the failure of the internal controls Miano was able to indulge in fraudulent activities in a bolder manner.

Through an internal audit Miano's activities were found out by the auditor and the vice president. Then Miano accepted that he was guilty and only showed less than half the amount spent on tangible assets from the accumulated fraudulent activities for four years.

8 0
4 years ago
A coupon bond that pays interest of 4% annually has a par value of $1,000, matures in 5 years, and is selling today at $785. The
olganol [36]

Answer:

9.62%.

Explanation:

Set the values of the bond on the financial calculator as follows :

PV = - $785

FV = $1,000

PMT = $1,000 x 4% = $40

P/YR = 1

N = 5

I/YR = ??

Here the question requires us to determine the value of the yield to maturity or I/YR.

Inputting the values as above in the financial calculator gives the I/YR as 9.62%.

3 0
3 years ago
An amount, P, must be invested now to allow withdrawals of $900 per year for the next 13 years and to permit $320 to be withdraw
coldgirl [10]
In my further research and understanding, the amount P that is invested now to allow withdrawals of $900 per year for the next 13 years and to permit $320 to be withdrawn is $100. I hope you are satisfied with my answer and feel free to ask for more if you have questions and further clarifications 
4 0
4 years ago
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