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Brums [2.3K]
4 years ago
6

The Francis Company is expected to pay a dividend of D1 = $1.25 per share at the end of the year, and that dividend is expected

to grow at a constant rate of 6.00% per year in the future. The company's beta is 1.15, the market risk premium is 5.50%, and the risk-free rate is 4.00%. What is the company's current stock price?
Business
1 answer:
Romashka [77]4 years ago
5 0

Answer:

$28.90

Explanation:

For computing the current stock price, first we have to determine the required rate of return which is shown below:

In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below

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

= 4% + 1.15 × 5.50%

= 4% + 6.325%

= 10.325%

The (Market rate of return - Risk-free rate of return)  is also known as market risk premium

Now the current stock price would be

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

= $1.25 ÷ (10.325% - 6%)

= $1.25 ÷ 4.325%

= $28.90

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Ruiz Co.'s budget includes the following credit sales for the current year: September, $145,000; October, $136,000; November, $1
Vinvika [58]

Answer:

The total collection in December is "131150".

Explanation:

The given values are:

Credit sales,

  • September: $145,000
  • October: $136,000
  • November: $120,000
  • December: $157,000

Now,

Credit sales in December will be:

= 157,000\times 15 \ percent

= 157000\times 0.15

= 23550

Credit sales in November will be:

= 120000\times 50 \ percent

= 120000\times 0.5

= 600000

Credit sales in October will be:

= 136000\times 35 \ percent

= 136000\times 0.35

= 47600

hence,

The total collection will be:

= 23550+60000+47600

= 131150

6 0
3 years ago
Krentz Insulating accepted a 3-year note for $1,500 in lieu of immediate payment for insulating equipment sold to a local firm.
DiKsa [7]

Answer:

$1,331.96

Explanation:

Present value (PV) refers to today's worth of cash flows to be received at a future date. The formula for PV is given as follows:

PV = F ÷ (1 + r)^n ......................................... (1)

PV = present value = ?

F = Future amount or note amount = $1,500

r = interest rate = 4% annually = 0.04 annually

                         = (0.04 ÷ 2) semiannually = 0.02 semiannually

n = number of compounding period = 3 years

  = (3 × 2) semiannually = 6 semiannually

Substituting the figures above into equation (1). we have:

PV = $1,500 ÷ (1 + 0.02)^6

     = $1,500 ÷ (1.02)^6

     = $1,500 ÷ 1.126162419264

     = $1,331.96  

Therefore, the present value of the note at 4% per year compounded semiannually is $1,331.96.

6 0
4 years ago
Once unexpended Research, Development, Test and Evaluation (RDT&E) funds have expired, they can be used for ________________
nadezda [96]

Answer:

The correct answer is letter "D": Payments or adjustments to the original obligations.

Explanation:

Research Development Test & Evaluation (RDT&E) funds are dedicated to cover costs of specific research, development, testing and assessment activities. Once deadlines to present the research are due, the funds can be directed to maintenance of laboratories or any other payment or adjustment besides the initial purpose of that money.

3 0
3 years ago
which of the following is not an economic goal of leaders of most nations? a. efficiency b. price stability c. growth d. full em
Darina [25.2K]

One thing that is not the economic goal of most nations is e. excess goods and services.

<h3>What economic goals do most countries want?</h3>

Most countries want to be able to provide their people with an adequate living standard.

For this to happen, the economy needs to be growing and have price stability as well as full employment. There is no need for excess goods and services because this represents a waste of resources.

Find out more on economic goals at brainly.com/question/3140788.

#SPJ11

4 0
2 years ago
What type of degree do u need to have to be a hairstylist?
Ksju [112]
Hello there.

Question: <span>What type of degree do u need to have to be a hairstylist?

Answer: You would need a high school diploma or a GED for cosmetology school. You would then need an associate's degree in cosmetology.

Hope This Helps You!
Good Luck Studying ^-^</span>
6 0
3 years ago
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