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dezoksy [38]
3 years ago
15

The stock of Canadian Ski Wear is currently trading at $45 a share and the equity beta of the company is estimated to be 1.3. Th

e company is expected to pay a dividend of $1.50 a share next year, and this dividend is expected to grow at a rate of 4% per year. The rate on the 10-year U.S. Treasury bond is 4% and you estimate the market risk premium to be 5%. Using the CAPM, what is the company’s cost of equity?
Business
1 answer:
Vesnalui [34]3 years ago
6 0

Answer:

10.5%

Explanation:

In this question, we use the Capital Asset Pricing Model (CAPM). The formula is shown below:

Expected rate of return = Risk-free rate of return + Beta × market risk premium

= 4% + 1.3 × 5%

= 4% + 6.5%

= 10.5%

The market risk premium = Market rate of return - risk free rate of return.

The dividend and per share is not relevant for the computation part. Hence, ignored it

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You just took out a​ $12,000 loan for your small business. the loan has a four year term and repayment is in the form of four eq
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Explanation:


We use a mortgage calculator to calculate the interest paid in the final payment. Since each repayment is made at the end of year, the repayments are annual payments. So, the calculator should have an annual amortization schedule to solve the problem.

I used http://www.calculator.net/loan-calculator for the calculation because it has an annual payment schedule. Then, I went under the subtitle Paying Back a Fixed Amount Periodically because the payments are equal. In that online calculator, I just input these data:

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To determine the interest paid at the final payment, I looked at payment #4 because the final payment is at the 4th year. (The loan is paid in 4 annual payments).

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3 0
3 years ago
Keren Wiseman is an employee of Dimensionworks Designs in New Mexico. She received the following achievement awards from her emp
puteri [66]

Answer:

$2,300

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Assuming that the requirements for qualified plan awards are otherwise satisfied, each award by itself would be excluded from income.

The excludable amount or deduction is $1,600 out of total amount of awards.

Total amount of awards = Design + Graphic + Employee  of the year

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However, because the $3,900 total value of the awards is more than $1,600, Keren must include $2,300 in his taxable income.

8 0
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