Answer:
$11.98
Explanation:
A share of common stock just made a dividend payment of $1.00
The expected long-run growth rate of for this stock is 5.4%
= 5.4/100
= 0.054
The investors required rate of return is 14.2%
= 14.2/100
= 0.142
The first step is to calculate the dividend year 1(D1)
D1= Do(1+g)
= 1(1+0.054)
= 1×1.054
= $1.054
Therefore, the stock price can be calculated as follows
Po= D1/(rs-g)
= 1.054/(0.142-0.054)
= 1.054/0.088
= $11.98
Hence the Stock price is $11.98
The supply of loanable funds would increase and interest rates would fall.
For instance, they may lower or do away with taxes on savings interest. More people would be motivated to cut back on their present levels of consumption and increase their savings as a result of the enhanced tax benefits associated with saving.
This will result in a rise in the amount of loanable money available (shift to the right.) The interest rate at equilibrium will decrease. People and businesses will have more motivation to borrow as the interest rate declines, pushing up the demand curve and increasing the equilibrium amount of borrowing and lending in the market.
Learn more about interest rates here:
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Can you please try to take a better pic
Answer:
Material used = $855,000
Explanation:
The computation of the cost of direct material used is shown below;
Material purchased = $828,000
Add:
Opening Inventory = $279,000
Less:
Closing Inventory = ($252,000)
Material used = $855,000
we simply applied the above formula so that the cost of direct material used could come
Hence, the cost of direct material used in production is $855,000
Answer:
The portfolio with a beta of 1.38 should earn the most risk premium based on CAPM.
The correct answer is B
Explanation:
A diversified portfolio with returns similar to the overall market will not earn the most risk premium because its beta is equal to 1.
A stock with a beta of 1.38 produces the most risk premium because any stock with the highest beta gives the highest risk-premium. This is the correct answer.
A stock with a beta of 0.74 does not provide the highest risk premium.
Us treasury bill does not provide any risk premium since it is the risk-free rate.
A portfolio with a beta of 1.01 does not produce the highest risk premium.
