Answer:
Explanation:
first of all we need to identify required rate of return
as per the given date in the question we can apply Capita asset pricing model to identify the Ke that is cost of equity.
We have
Ke = Rf+(Rm-Rf)*beta
Ke=2%+(7%-2%)*1.39
Ke=2%+(5%)*1.39
Ke=2%+6.95
Ke=8.95
Now we need to identify the share price after five year with same return
Share price = 862*(1+8.95%)^5
Share price after five year = 1323.255
Answer:
True.
Explanation:
If investors prefer firms that retain most of their earnings, then a firm that wants to maximize its stock price should set a low payout ratio.
And her in a case of a retired individual who lives on his or her investment income, then it would make sense for this person to prefer stocks with high payouts so he or she could receive cash without going to the trouble and expense of selling stocks. On the other hand, it would make sense for an individual who would just reinvest any dividends received to prefer a low-payout company because that would save him or her taxes and brokerage costs.
Answer:
A)If interest rates decline, the prices of both bonds will increase, but the 15-year bond would have a larger percentage increase in price.
TRUE
As it has more time to maturity it will have a higher time expose to the rate therefore, will be more volatile against the rate fluctuations
Explanation:
The 10-year ond is issued at premium, above par as the coupon rate 12% is higher than market rate 10%. Each year will decrease the market value to come closer to maturity date.
The 15-year ond is issued at discount, below par as the coupon rate 8% is lower than market rate 10%. Each year will increase the market value to come closer to maturity date.
Answer:
Project feasibility.
Explanation:
Project feasibility is an analysis of how viable a project is and considering technical and legal feasibility of a project. Also it looks at the economic justification of the project. Is it profitable for the business to undertake the project?
Project feasibility tells one of a project is worth doing or if it is doable.
Concept or the idea and development phase focus are part of the project feasibility stage. Where ideas are analysed to see their viability and developed.