1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
EleoNora [17]
3 years ago
7

A share of stock sells for $50 today. It will pay a dividend of $6 per share at the end of the year. Its beta is 1.2. What do in

vestors expect the stock to sell for at the end of the year?
Business
1 answer:
gladu [14]3 years ago
5 0

Answer:

$53

Explanation:

The computation of the stock sale at the end of the year is computed after calculating the required rate of return and the growth rate

The required rate of return by applying the Capital Asset Pricing model formula is

= Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

= 6% + 1.2 × (16% - 6%)

= 6% + 12%

= 18%

Now the growth rate is

Stock price = Dividend per share÷ (Required rate of return - growth rate)

$50 = $6 ÷ (18% - growth rate)

So, the growth rate is 6%

Now the ending stock price is

Next year dividend ÷ (Required rate of return - growth rate)

where,  

Next year dividend is  

= $6 + $6 × 6%

= $6 + 0.36

= $6.36

So,

= ($6.36) ÷ (18% - 6%)

= $53

You might be interested in
Luebke Incorporated has provided the following data for the month of November. The balance in the Finished Goods inventory accou
vodka [1.7K]

Answer: $‭238,800‬

Explanation:

Adjusted Cost of Goods for November = Beginning Finished good inventory + Cost of goods manufactured  - Ending Finished goods inventory - Overapplied Overheads

Overapplied Overhead = Overhead applied - Actual Overhead

= 60,400 - 56,800

= $3,600

Adjusted Cost of Goods for November = 58,000 + 215,000 - 30,600 - 3,600

= $‭238,800‬

8 0
3 years ago
A salesperson receives a base salary of $1,200 per month plus a commission of 6 percent on each sale. The following sales were m
Sveta_85 [38]

Answer:

$4062

Explanation:

base salary of $1,200

+ 6% of each sale

so $1,200 + $390 + $619.20 + $42 + $70.80 + $1,740

=$4062

5 0
2 years ago
If the beginning Cash account balance of Moonbeam, Inc. was $40,000, the ending balance was $67,200, and the total cash paid out
lara [203]

Answer:

Cash Received during the period = $155200

Explanation:

The amount of receipts or cash received during the period can be calculated using the following formula.

Cash Received = Closing Balance + Cash Disbursements - Opening Balance

Cash Received = 67200 + 128000 - 40000

Cash Received = $155200

So, the cash receipts during the period are $155200.

7 0
3 years ago
As you describe your products or services in your business plan, the most effective approach is to
alexgriva [62]
Have a clear description of what exactly your product or service is going to be and how you plan to accomplish your set goals.
Focus on what target market your product is for.
Describe the benefits of this product
Have other people offer proof to how good the product is
Make the description easy to read and understand.
7 0
3 years ago
There may be a great deal of interaction between a service provider and a consumer in which they co-create value together. In su
fomenos

Answer:

Inseparability

Explanation:

Inseparability is one of the key principles in properly understanding the concept of service quality delivery. Service Quality is a phenomenon which seeks to determine, evaluate and critically look into how service delivered tow in line with the clients' expectations and objectives.

Evidently, and in a bid to co-create value, there is often a great deal of interaction between a service provider and a consumer. Suffix to say, the consumer here could be an individual or a body corporate.

A good service quality delivery is hinged on the skills, abilities and competencies of parties involved. The implication of the foregoing is that the end product of an exercise and in this case - value creation, is proportionate to the abilities and skills the individuals involved are bringing on board.

When service is been provided and expectations fall short, what I would do as a rational consumer is to match the provider of the service with the service provided. In this case, evaluation, rating and critical appraisal will be solely placed on the service provider. A consistent good service quality delivery by a particular service provider is enough to buy me over by the said provider, as it would have been established, through the service provider's track record, that good service quality delivery is its hallmark. Hence, more often than not, we say a client expectations of a product or service is inseparable to the product or service provider.

4 0
3 years ago
Other questions:
  • Wexpro, Inc., produces several products from processing 1 ton of clypton, a rare mineral. Material and processing costs total $6
    7·1 answer
  • Suppose nanospeck, a biotechnology firm, is selling bonds to raise money for a new lab—a practice known as
    13·1 answer
  • Diseconomies of scale imply that the average total cost curve is downward-sloping in the long run.
    10·1 answer
  • What determines the value of an item?
    7·2 answers
  • Marigold Corp. showed the following balances at the end of its first year:
    8·1 answer
  • At the end of its first month of operations, JMP Consulting reported net income of $25,000. They also had account balances of: C
    11·1 answer
  • An institution must permit a student to review his records within how many days from the day the student requests the review
    11·1 answer
  • During the current period, Roberts recognized interest expense of $9,400 and paid interest of $9,000 related to its discounted b
    15·1 answer
  • Ok I need serious help!!!!!!
    14·1 answer
  • what would you do if you were offered a promotion that you were not certain about accepting? What factors would you take into ac
    8·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!