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rjkz [21]
2 years ago
15

Floyd Industries stock has a beta of 1.25. The company just paid a dividend of $.40, and the dividends are expected to grow at 5

percent per year. The expected return on the market is 12 percent, and Treasury bills are yielding 5.0 percent. The most recent stock price for Floyd is $67. a. Calculate the cost of equity using the DDM method. (Round your answer to 2 decimal places. (e.g., 32.16)) DCF method % b. Calculate the cost of equity using the SML method.
Business
1 answer:
stiks02 [169]2 years ago
3 0

Answer:

5.62%

13.75%

Explanation:

According to the DDM method,

the value of a stock = [dividend x ( 1 + growth rate)] / [cost of equity - growth rate]

67 = 0.4(1.05) / r - 0.05

multiply both sides of the equation by r -0.05

67(r - 0.05) = 0.42

divide both sides of the equation by 67

r - 0.05 = 0.006269

r = 0.0563

= 5.63%

b. the cost of equity using the capm method =

risk free rate of return + beta x ( expected return - risk free return)

5% + 1.25 x (12 - 5) = 13.75%

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Verbal communication in the workplace.

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Being voice a part of the skills and knowledge for effective communication, an in-depth interviews of top management and communicators is essential to design an effective employee communication program to gather, convey and receive information  and people skills , respecting cultural differences and related legislation. This knowledge and skills will structure the ability to communicate effectively with employees during the day  in the workplace.

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3 years ago
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Early in 2022, Stevenson Incorporated switched to a JIT (just-in-time) inventory system. Financial information for the two most
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3.8 times

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2 years ago
QUESTION 5 of 10: Since you rely on your parent/guardian for your food, shelter, and clothing, you are considered:
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Answer:

C) A dependent

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The total amount of carbon fixed into organic matter through photosynthesis (or chemosynthesis) in a given unit of time is known
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<h3>What is Gross primary productivity?</h3>

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4 0
1 year ago
Suppose Capital One is advertising a 60​-month, 5.89 % APR motorcycle loan. If you need to borrow $ 9 comma 400 to purchase your
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Answer:

My Monthly payment will be $181.25

Explanation:

A loan provide funds for acquisition of asset and for investment purposes and its allows the arrangement for flexible repayments throughout the loan period based on terms agreed between the lender and borrower.

Following Formula used to calculate the installment payment.

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