Answer:
1. Current bonds price = $81.86.
2. Yield to maturity = 22.16%.
3. 3. Expected Return = 7.5%.
Explanation:
Required Rate = Rf + beta*MRP
= 5% + 0.25*(15% - 5%)
= 5% +0.25*10%
= 5% + 2.5% = 7.5%
Required Rate = 7.5%
Expected Future Value = 70% x $100 + 30% x $60
= (0.7*$100) + (0.3*$60)
= $(70+18) = $88
Expected Future Value = $88
1. Current bonds price = 88/1.075 = $81.86
2. Yield to maturity = 100/81.86 - 1 = 1.22159785-1 = 0.22159785 = 22.159785% = 22.16%
3. Expected Return = 7.5%
Answer:
Marketing and distribution of a variety of products
Explanation:
Marketing refers to a business function whereby a marketer advertises and promotes goods and services with an objective to increase sales and at the same time ensure customer satisfaction. Marketing mix refers to essential marketing components for effective marketing.
Marketing mix comprises of product, place, price and promotion.
Distribution refers to activities which are aimed at making products available in the right markets at the right time and utilizes various channels of distributions such as retailers, wholesalers, intermediaries, etc.
In the given case, Starbucks, the renowned coffee maker, has formed alliances or collaborations so as to extend and strengthen their business. These strategic alliances help Starbucks create an effective distribution network and wide-reach marketing which subsequently helps in efficient operations and profitability.
Answer:
The correct answer is letter "B": dividend growth.
Explanation:
A dividend is a cash distributed by a company to its shareholders. The dividend growth is the rate that measures the increase in a dividend given a certain period, typically calculated in the term of one year. The dividend growth is also considered a gauge that may predict the future continuation of the behavior of profits within a company. In that sense, it can influence the current price of a stock and the discount rate as well.
Answer:
(A) It may serve only one country but have suppliers or facilities in other countries.
Explanation:
- An MNC is a multinational enterprise as its a corporate organization that serves the goods and services and also manages the production the establishments, and thus has a plants located in at least two countries and engages in FDI foreign direct investment as the firm markets have a direct investment in the host countries equity ownership and managerial control.
- They generally make a significant investment in a foreign country, also buying and selling licenses in the foreign markets and prover their global presence in a variety of ways like advertising costs over the global sales, pooling of global purchasing power over the suppliers, and also spreading R&D and innovation in markets.
Answer:
d. $2(1.10)/[0.15-0.10]
Explanation:
The formula to compute the today value of the stock by using the Gordon model is shown below:
= Next year dividend ÷ (Required rate of return - growth rate)
where,
Next year dividend is
= $2 + $2 × 10%
= $2 + 0.2
= $2.2
And, the required rate of return is 15%
Plus the growth rate of return is 10%
So, the today value of the stock is
= $2.2 ÷ (15% - 10%
= $44