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Annette [7]
3 years ago
11

Torque Corporation is expected to pay a dividend of $1.00 in the upcoming year. Dividends are expected to grow at the rate of 6%

per year. The risk-free rate of return is 5% and the expected return on the market portfolio is 13%. The stock of Torque Corporation has a beta of 1.2. Torque's stock price is
Business
1 answer:
dezoksy [38]3 years ago
7 0

Answer:

The answer is "\$11.62 \ (approx)"

Explanation:

Using formula:

\text{Required return=risk free rate}+\text{beta}\times \text{(market rate-risk free rate)}

=5+(13-5) \times 1.2\\\\=14.6\%\\\\\text{Intrinsic value}=\frac{D_1}{\text{(Required return-Growth rate)}}\\\\= \frac{1}{(0.146-0.06)}\\\\= \frac{1}{(0.140)}\\\\=\$11.62\ (Approx)

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Answer:

Are added expenses beyond that for the wages and salaries earned by employees

Explanation:

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Which of the following statements is CORRECT?a. When diversifiable risk has been diversified away, the inherent risk that remain
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Answer:

The SML relates a stock's required return to its market risk. The slope and intercept of this line cannot be controlled by the firms' managers, but managers can influence their firms' positions on the line by such actions as changing the firm's capital structure or the type of assets it employs.

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