Answer:
a. 6.7%
b. 12.0%
Explanation:
a. DDM
Dividende Discount Method is used to calculate the price of the stock using Dividend, rate of return and growth rate.
Return on equity = [ Dividend x ( 1 + growth rate ) / Price of stock ] + Growth Rate
Return on equity = [ $0.5 x ( 1 + 6% ) / $76 ] + 6%
Return on equity = [ $0.5 x ( 1.06 ) / $76 ] + 0.06
Return on equity = 6.7%
b. SML
Security Market line method uses calculates the cost of capital using following formula
Re = R
f + β ( Rm − R
f )
Rf = Risk free rate
β = stock beta
Rm = Market rate
Re =Expected rate
Re = 5.9% + 1.20 ( 11% - 5.9% )
Re = 12.02%
Answer:
c. $24.00
Explanation:
The computation of the target cost is shown below:
Target cost = Selling price - (Selling price × profit margin)
where,
Selling price = $30
And, the profit margin is 20%
So, the target cost is
= $30 - ($30 × 20%)
= $30 - $6
= $24
Basically, by using the above formula, we can find out the target cost after considering the selling price and the profit margin
Answer: Variable cost pricing
Explanation:
Marianne wants to sell in Mexico by setting the selling price in such a way that she adds the total variable cost to the markup. This way she would meet her cost and gain some level of profit.
Answer:
c. Wilma (and each of the members) pays taxes on their $1 million share ($5 million divided by 5) of profits.
Explanation:
Data provided in the questions
Generated profits = $5 million
Reinvested amount into the company = $4 million
Out of which $1 million is to be divided equally
based on the above information, the federal income tax should be paid by 5 members of $1 million each
Hence, the option c is correct
And all other options are wrong
Answer: An entrepreneur , a labor
Explanation: An entrepreneur is an entity that introduces a new company that carries almost all of the risks and benefits. The entrepreneur is generally seen as a visionary, a creator of new ideas, products, services and/or techniques.
Labor is the level of physical, emotional, and social effort which is used in an economy to generate wealth. It provides the necessary resources, equipment, and infrastructure to convert raw resources into final services and products.
Hence we can conclude that Beth is entrepreneur and will is labor.
