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3 years ago

What is the expected return if a firm has a payout ratio of 0.4, a return on equity of 25%, and a dividend yield of 6%

Business

1 answer:

Varvara68 [4.7K]3 years ago

6 0

Answer:

21%

Explanation:

We can calculate the expected return of a firm by add dividend yield and growth rate but in this question, the growth rate is not given therefore we will find growth rate first with the available data

DATA

Payout ratio = 0.4

Return on equity = 25%

Dividend yield = 6%

Solution

Growth rate = Return on equity x retention ratio

Growth rate = Return on equity x (1 - payout ratio)

Growth rate = 25% x (1-0.4)

Growth rate = 25% x 0.6

Growth rate = 15%

Expected return = Dividend yield + growth rate

Expected return = 6% + 15%

Expected return = 21%

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Blossom Corp. will pay dividends of $5.00, $6.25, $4.75, and $3.00 in the next four years. Thereafter, management expects the di

Shkiper50 [21]

Answer:

Present value = $35.00326585 rounded off to $35.00

Explanation:

Using the dividend discount model, we calculate the price of the stock today. It values the stock based on the present value of the expected future dividends from the stock. To calculate the present value of the stock, we will use the following formula,

Present value = D1 / (1+r) + D2 / (1+r)^2 + ... + Dn / (1+r)^n +

[(Dn * (1+g) / (r - g)) / (1+r)^n]

Where,

r is the required rate of return

g is the constant growth rate in dividends
n is the number of years

Present value = 5 / (1+0.155) + 6.25 / (1+0.155)^2 + 4.75 / (1+0.155)^3 +

3 / (1+0.155)^4 + [(3 * (1+0.07) / (0.155 - 0.07)) / (1+0.155)^4]

Present value = $35.00326585 rounded off to $35.00

3 0

3 years ago

I will give brainliest if correct

stepan [7]

Answer:

I believe that it is A and C

Explanation:

5 0

3 years ago

White Tiger Electronics produces CD players using an automated assembly line process. The standard cost of CD players is $148 p

Stolb23 [73]

Answer:

A) a 23.5% decrease in materials

B) a 64% decrease in labor costs

C) a 29.1% decrease in overhead

Explanation:

White Tiger's multifactor productivity = $300 / $148 = 2.027

if we want to increase the multifactor productivity by 12%, it will = 2.27

since we will not change the sales price, we must determine the new total cost:

$300 / cost = 2.27

cost = $300 / 2.27 = $132.16 ≈ $132, which represents a $16 decrease

A) materials ⇒ $16/$68 = 23.5%

B) labor costs ⇒ $16/$25 = 64%

C) overhead ⇒ $16/$55 = 29.1%

4 0

3 years ago

Suppose in 2016, you purchase a house built in 2003. Which of the following would be included in the gross domestic product for

Katen [24]

Answer:

1) C) The value of the services of the real estate agent

2) B) $6,400

Explanation:

First, there are two questions lumped together as one

Question 1: Suppose in 2016, you purchase a house built in 2003. Which of the following would be included in the gross domestic product for 2016?

A) The value of the house in 2013

B)The value of the house in 2016 minus depreciation

C) The value of the services of the real estate agent

4) The value of the house in 2016

Question 2: Suppose that a simple economy produces only four goods and services shoes. DVDs, tomatoes, and ketchup. Assume one half of the tomatoes are used in making the ketchup and the other half of the tomatoes are purchased by households.

Products Quantity Price

Shoes 40 $60

DVDs 100 $18

Tomatoes 2,000 $1

Ketchup 300 $4

Using the information in the above table, nominal GDP for this simple economy equals A) $7, 400. B) $6, 400. C) $5, 800 units. D) $2, 440.

<u>Answer to the First Question</u>

First the Gross Domestic Product of a Country usually represents the market value or referred to as total monetary value of finished products as well as services that were engaged in during a specific period of time and within the borders of that country. The thing about GDP is that it only reflects items that are captured as products or services and which are reported for the year.

In the question therefore, the GDP will only reflect the value of product or service that was newly created in 2016. The house was built in 2003, therefore the relevant GDP item (value of the house) was captured in 2003.

The only new value is the Value of the services of the real estate agent who was engaged in 2016 to facilitate the sales of the house.

<u>Answer to the Second Question:</u>

Nominal GDP represents GDP valued at current market prices for products or services.

To calculate the Nominal GDP we look at the goods and then calculate based on their current market prices.

(Shoes = 40 pieces x $60) + (DVDS = 100 pieces x $18) + (Tomatoes (1000x$1 - 1/2 purchased by households) + (Ketchup 300 x $4)

= $2400+ $1,800+ $1000+ $1,200

= $6,400

5 0

3 years ago

A company has two products: A1 and B2. It uses activity-based costing and has prepared the following analysis showing budgeted c

lawyer [7]

Answer:

E $4.00

Explanation:

Calculation of the approximate overhead cost per unit of Product B2 under activity-based costing.

Calulation of the Activity 1 allocated to Product B2 line:

$48,000 × 4,800/6,000 = $38,400

Calculation of the Activity 2 allocated to Product B2 line:

$63,000 × 4,760/7,000 = $42,840

Calculation of the Activity 3 allocated to Product B2 line:

$80,000 × 800/8,000 = $8,000

Hence the Total overhead allocated to Product B2 will be :

$38,400+$42,840+$8,000

= $89,240

The Overhead per unit of Product B2 will be :

$89,240/22,310

= $4.00

Therefore the approximate overhead cost per unit of Product B2 under activity-based costing will be $4.00

4 0

3 years ago