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shtirl [24]
2 years ago
9

The future earnings, dividends, and common stock price of Carpetto Technologies Inc. are expected to grow 7% per year. Carpetto'

s common stock currently sells for $23.00 per share; its last dividend was $2.00; and it will pay a $2.14 dividend at the end of the current year. If the firm's beta is 1.3, the risk-free rate is 9.5%, and the average return on the market is 13%, what will be the firm's cost of common equity using the CAPM approach?
Business
1 answer:
bearhunter [10]2 years ago
8 0

Answer:

14.05%

Explanation:

Given that,

Beta = 1.3

Risk-free rate (Rf) = 9.5%

Return on the Market (RM) = 13%

According to CAPM approach:

Cost of common equity (RE):

= [Rf + β (RM – Rf)]

= [9.5% + 1.3 (13% - 9.5%)]

= [9.5% + 1.3 (3.5%)]

= [0.095 + 1.3 (0.035)]

= [0.095 + 0.0455]

= 0.1405

= 14.05%

Therefore, the firm's cost of common equity is 14.05%.

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The inventory indicates that the cost of goods sold will be $25000.

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It should be noted that the cost of goods sold ic calculated through the formula:

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brainly.com/question/24868116

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2 years ago
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<h3>Hello there!</h3>

Your question asks what the purpose of a safety stock is.

<h3>Answer: B). control the likelihood of a stock out due to variable demand​ and/or lead time.</h3>

The reason why answer choice "B). control the likelihood of a stock out due to variable demand​ and/or lead time" is the correct answer because companies have safety stocks to control the chances of having a stock out.

Safety stocks are also known as a "reserve" for a company, in other words, stocks that a company doesn't touch. It's to ensure that companies don't go through a time where there's an increase in demand while there is a "delay" in production.

If a companies stock demand goes up, but then they can't "produce" the amount that is needed to meet the demand, then they will go through "stock out" and have to go through what is called "stock out costs."

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6 0
3 years ago
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C) open entry and exit.
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nydimaria [60]

Answer:

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Giving the following information:

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