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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%

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Fundamental economic problems basically arise from Select one: a. the fact that society has more than it needs. b. turmoil in th
notka56 [123]

Answer:

D) a society's wants exceeding its scarce resources.

Explanation:

All resources are scarce, starting with time, money, materials, everything. Even the richest person or corporation in the world, has a limited amount of money (it may be huge, but it is still limited). There is not enough to satisfy the needs of society, not enough food, money, cars, clothes, phones, TVs, space, etc.

There are some things that seem to be unlimited though, and those are our needs, wants and desires. One of humankind's greatest defects is that there is no balance (or enough) in our lives, we always want more and more. That is why we are killing our own world and justify it by saying that our lives are getting better.

7 0
3 years ago
Ne
natta225 [31]

Answer:A. Recycle their old cell phones

Explanation:just took the test on edgeunity

6 0
3 years ago
Year-to-date, Oracle had earned a −1.34 percent return. During the same time period, Valero Energy earned 7.96 percent and McDon
Stels [109]

Answer:

Portfolio Return is 1.98%.

Explanation:

Weighted Average Return is used for to Calculate Portfolio's Return.

Portfolio Return = (-0.0134 * .3) + (0.0796 * .25) + (0.0088 * .45)

                            = -0.00402 + 0.0199 + 0.00396 = .01984 = 1.98%.

5 0
3 years ago
On December 31, 2020, the Bennett Company had 105,000 shares of common stock issued and outstanding. On July 1, 2021, the compan
fredd [130]

$4.40 per share

Explanation:

The computation of the earning per share is shown below:

Earning per share = (Net income - preference dividend) ÷ (Weighted average of number of shares)

where,

Net income is $640,000

Preference dividend is $72,000

And, the weighted average number of share is

= 120,000

6 0
3 years ago
Which of the following has caused organizations to establish knowledge management programs in their information technology (IT)
quester [9]

Answer:

The correct answer is letter "B": Globalization.

Explanation:

In the corporate world, globalization has pushed companies to adopt the use of Information Technology (IT) to virtually track their operations with customers and keep a better record of the use of their resources. The introduction of computer software and technology have made the gathering and recording of information faster and easier. Thanks to the use of that information, better decisions can be made by managers.

5 0
3 years ago
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