1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Harlamova29_29 [7]
3 years ago
11

Cache Creek Manufacturing Company is expected to pay a dividend of $3.36 in the upcoming year. Dividends are expected to grow at

8% per year. The risk-free rate of return is 4%, and the expected return on the market portfolio is 14%. Investors use the CAPM to compute the market capitalization rate and use the constant-growth DDM to determine the value of the stock. The stock's current price is $84. Using the constant-growth DDM, the market capitalization rate is _________.
Business
1 answer:
Nutka1998 [239]3 years ago
6 0

Answer:

12%

Explanation:

Dividend Valuation method is used to value the stock price of a company based on the dividend paid, its growth rate and rate of return. The price is calculated by calculating present value of future dividend payment.

Formula to calculate the value of stock

Price = Dividend / ( Rate or return - growth rate )

$84 = $3.36 / ( Required Rate of return - 8% )

$84 = $3.36 / ( Required Rate of return - 0.08 )

Required Rate of return - 0.08  = $3.36 / $84

Required Rate of return - 0.08  = 0.04

Required Rate of return = 0.04 + 0.08

Required Rate of return = 0.12 = 12%

You might be interested in
Factors influencing the rate of elimination of alcohol include _________.
pychu [463]
The correct answer is C
3 0
3 years ago
Read 2 more answers
Which one of the following is not true concerning socializing in the workplace? <br> A. Socializing can keep you from reaching y
postnew [5]
The correct answer is D. Socializing can actually increase productivity. Although socializing outside of work can be productive for the work itself later on, socializing in the workplace can deter you from working and can ultimately be bad for the company. If you're always running around form office to office having fun and not working you're not doing your company a favor.
6 0
3 years ago
Sunway Megamall is a planned shopping center in Cebu city with nearly 400,000 square feet of shopping space, and it serves aroun
Alborosie

Answer: regional shopping center  

             

Explanation: Simply put, a regional shopping center refers to the major retail shopping center covering a city or state's separate geographic area, containing at least one large full-line department store, as well as a variety of other merchants and service companies.

It is designed along at least one complete-size department store and sometimes several; there are several specialty shops and boutiques, and typically there are several establishments.

Hence from the above we can conclude that the given case depicts regional shopping center.

4 0
3 years ago
Barron, Inc. is considering a four-year project that has an initial outlay or cost of $90,000. The future cash inflows from its
Rudiy27

Answer:

D. The IRR is about 22.80%

Explanation:

If we use excel instead of trial and error method, it is easy to determine the Internal rate of return. As there is no cost of capital, it is challenging to determine IRR through the trial and error method.

The following image shows the IRR of this project is 22.80%.

4 0
3 years ago
The financial records for the Harrison Manufacturing Company have been destroyed in a fire. The following information has been o
kvasek [131]

Answer:

d. $8,300.

Explanation:

             Direct Materials

Beginning     8,200

Purchases   *16,800

Requisitions             18,400

Ending          6,600

We solve for purchases:

6,600 + 18,400 - 8,200 = 16,800

WIP Inventory

Beginning                7,700

Materials                18,400

Labor                     13,700

Overhead               8,200

Transferred Out    <u>             39,700*</u>

Ending                    8,300

The transferred-out from WIP inventory is the transferred-in for Finished Goods

8 0
3 years ago
Other questions:
  • Answer the question using the following data, which show all available techniques for producing 20 units of a particular commodi
    12·1 answer
  • Coca-Cola was first marketed in the 1860s as a patent medicine, designed to offer the virtues of cocaine without the vices of al
    6·1 answer
  • Dan, the founder of four muddy paws, discovered that dog owners were willing to spend extra money on unique, healthy treats for
    5·1 answer
  • Groupthink is defined as
    14·1 answer
  • Dom, an EZ Baked Goods salesperson, follows Flora, a salesperson for Goody Pastries, Inc, as she attempts to make sales to food
    7·1 answer
  • At the beginning of year 1, Looby Corp. purchases equipment for $100,000. The equipment has a residual value of $20,000 and an e
    14·1 answer
  • Seaburst Construction Project You are the project manager for the Seaburst construction project. So far the proj- ect is progres
    13·1 answer
  • [Related to Solved Problem​ 3.1B] In​ 2015, the Washington Nationals baseball team signed pitcher Max Scherzer to a contract to
    6·1 answer
  • Why is it that restaurants have been so slow in adopting analytics
    8·1 answer
  • Lease or Sell Casper Company owns a equipment with a cost of $366,000 and accumulated depreciation of $53,200 that can be sold f
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!