Answer: 0.9
Explanation:
The Expected Return on an investment can be calculated using the Dividend Discount Model as it is a key component in thw formula which is,
P = D1 / r - g
where,
D1 is the dividend paid next year
P is the current stock price
g is the growth rate
r is the expected return
With the given figures we have,
84 = 4.20 / r - 0.08
84 ( r - 0.08) = 4.20
r - 0.08 = 4.20/84
r = 4.20/84 + 0.08
r = 0.13
The Expected Return can be slotted into the CAPM formula to find the beta.
The CAPM formula calculates the Expected Return in the following manner,
Er = Rf + b( Rm - rF)
Where,
Er is expected return
Rf is the risk free rate
Rm is the market return
b is beta
Slotting in the figures gives,
0.13 = 0.04 + b( 0.14 - 0.04)
0.13 = 0.04 + b (0.1)
0.13 - 0.04 = 0.1b
b = 0.09/0.1
b = 0.9
Using the constant-growth DDM and the CAPM, the beta of the stock is 0.9
Answer:
a. $1,024.74
Explanation:
In this question, we use the present value formula which is shown in the spreadsheet.
The NPER represents the time period.
Given that,
Future value or par value = $1,000
Rate of interest = 6.1%
NPER = 8 years
PMT = $65
The formula is shown below:
= -PV(Rate;NPER;PMT;FV;type)
So, after solving this, the answer would be $1,024.74
Answer:
$33,000
Explanation:
The computation of the amount realized by X corporation is given below:
= Fair market value to the exchange + cash received
= $25,000 + $8,000
= $33,000
For determining the amount realized by X corporation we simply added the above two items so that the correct amount could come
Answer:
1. Two Stage Least Squares
Two stage least squares is a statistical technique of regression analysis. It is used to analyze structural equations. It is used to compute estimated values of the problematic predictors and then linear regression model of dependent variables is computed. This technique is also used in quasi experiments.
2. Estimation with control variables
A control variable is constant element which is kept unchanged throughout the process of experiment in order to get the estimation.
3. Panel estimation with fixed effects
In Panel estimation fixed effects are referred to the estimator of the coefficient in regression model. Panel estimation method with fixed effects helps estimation of equations.
Explanation:
1. Two Stage Least Squares
Two stage least squares is a statistical technique of regression analysis. It is used to analyze structural equations. It is used to compute estimated values of the problematic predictors and then linear regression model of dependent variables is computed. This technique is also used in quasi experiments.
2. Estimation with control variables
A control variable is constant element which is kept unchanged throughout the process of experiment in order to get the estimation.
3. Panel estimation with fixed effects
In Panel estimation fixed effects are referred to the estimator of the coefficient in regression model. Panel estimation method with fixed effects helps estimation of equations.
Answer:
Consumer pull caused a company to change its practises.
Explanation:
Consumer pull marketing is when a company devices several means to get customers to buy its products. The aim is to increase product demand, win and retain customer loyalty. Unlike consumer push which is a method used to dispose already existing products by bringing them to consumers ; consumer pull attract buyers to its product.
Generally, most companies uses several advertising mode like word of mouth referrals, placement of a product in a strategic place, sales promotion, blogs etc to stimulate the demand for their products since they know customers are looking for products that would meet or suit their need but needed to be attracted to the solution offered by the company.
Morever, the cost expended on consumer pull marketing is way higher before it becomes a brand and household name among consumers. As in the case above, the celebrities have influence on consumers demand for the products even though they have interest in purchasing them hence result to fall in market share.
Example of consumer pull marketing is children wares. Companies would get the wares advertised through various channels such that children and parents becomes attracted to them. Once they are attracted, demand for these wares will increase and retailers would also want to stock up their shops with these wares.
The whole process of the above example is called consumer pull because the company has been able to get customers to buy its products.
