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Stels [109]
3 years ago
7

Sure Tool Company is expected to pay a dividend of $2 in the upcoming year. The risk-free rate of return is 4%, and the expected

return on the market portfolio is 14%. Analysts expect the price of Sure Tool Company shares to be $22 a year from now. The beta of Sure Tool Company's stock is 1.25. The market's required rate of return on Sure's stock is Group of answer choices 17.5%. None of the options are correct. 16.5%. 14.0%. 15.25%.
Business
1 answer:
alexira [117]3 years ago
3 0

Answer:

The market's required rate of return on Sure's stock is 16.5%

Explanation:

The required rate of return is the minimum return that investors would accept to invest in a stock based on the risk associated to that stock. The required rate of return can be calculated using the Capital Asset Pricing Model (CAPM). The formula for required rate of return under this model is,

Required rate of return (r) =  rFR + Beta * (rM - rFR)

Where,

  • rFR is the risk free rate
  • Beta is the stock's measure of risk
  • rM is the expected return on market

Thus, for Sure Tool, the required rate of return is,

r = 0.04 + 1.25 * (0.14 - 0.04)

r = 0.165 or 16.5%

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Which of the following tools can the Fed use to contract the money supply? a. To expand the money supply? b. Increasing the disc
Alina [70]

Answer:

See below for details.

Explanation:

To contract the money supply the the Fed can increase the discount rate. This shall increase the cost of borrowing and thus the demand for money should go down. Furthermore, people have more incentive to save as they are getting an increased return thus the overall money supply contracts.

The Fed can also sell short term US securities, this reduces the amount of excess reserves available to banks and restricts their ability to make loans thus contracting the money supply.

The Fed can also raise the reserve requirement which reduces the banks ability to lend loans and create money thus contracting the supply again.

To expand the money supply, The Fed can lower the reserve requirements, creating excess reserves for banks that can be loaned out and thus expand money supply.

The Fed can also buy short term securities for money thus increasing the supply of money in the economy.

Quantitative easing simply increases the money supply with additional currency issuing so this expands the supply.

Decreasing the discount ratios discourage people from saving and encourages borrowing thus creating an expanded supply for money via credit creation.

Hope that helps.

7 0
4 years ago
A written report must be sent to the texas department of public safety within 10 days of a collision that
ratelena [41]

I believe the correct answer to fill in the blank is:

A written report must be sent to the texas department of public safety within 10 days of a collision that <u>“results in death, injury, or more than $1,000 damage to property”.</u>

8 0
3 years ago
Why does a more participative management style ("tipping the pyramid over") lead to greater responsiveness to customers’ needs,
suter [353]

Inclusive and participatory management practices are the most effective in today's society. The indices show that companies that adopt this style of management achieve continuous improvements throughout the organizational process. Organizational culture focused on employee well-being ensures a positive culture and this influences them to do their job more effectively. It also increases security, pride in being part of that company, and values.

4 0
3 years ago
Read 2 more answers
Based on the connecting letter report, salaries of which college majors are significantly different?
Assoli18 [71]

Answer:

C. Language and Music.

Explanation:

The letter report has listed salaries of various employees in different departments. The college majors have different salaries who teach different subjects. The salary for social science staff is higher than the language teaching staff. The most significantly different salaries are for language and music college majors.

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You are the manager of BlackSpot Computers, which competes directly with Condensed Computers to sell high-powered computers to b
Zina [86]

Answer and Explanation:

In order to know how this affects the production we will first find out the quantities produce before and after the technological advance.

Profit maximizing, MR = MC (Marginal revenue = Marginal Cost)

TR = P x Q

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MR = 5900 - 2Q (Taking derivative)

Now, MR = MC

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Q = 2550

After Technological advancement,

MR = MC

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After technological advancement, Backspot Computers are able to produce more quantities. An increase of 150 units. The technological advancement has helped them.

4 0
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