1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Daniel [21]
3 years ago
7

You bought Sumsung stock for $50 on April 1. The stock paid a dividend of $5 on July 1, and had a price of $53. It is now Oct. 1

, and the stock price is $52. Treasury bills yield 1%.
Required:
a. What was the arithmetic average quarterly return?
b. What was the standard deviation of quarterly returns?
Business
1 answer:
lisov135 [29]3 years ago
6 0

Answer:

a. 7.05%

b. 12.7%

Explanation:

a. The returns are:

First return July 1 = (Current price - Previous price + Dividend) / Cost price

= (53 - 50 + 5) / 50

= 16%

Second return Oct 1 = (52 - 53) / 53

= -1.9%

Arithmetic mean = (16 + (-1.9%)) / 2

= 7.05%

b. Variance = ((16% - 7.05%)² + (-1.9% - 7.05%)²)

= 160.205%

Standard deviation = √160.205

= 12.7%

You might be interested in
The constant dividend growth model: a. is more complex than the differential growth model. b. requires the growth period be limi
Finger [1]

Answer:

The correct answer is letter "D": can be used to compute a stock price at any point in time.

Explanation:

The Gordon Growth Model, also known as the Constant Dividend Growth Model, is used to measure the value of the stock at any point in time based on the projected future dividends of the stock. Investors and analysts are commonly used to compare the estimated value of the stock against the current market price. Analysts interpret the gap between the two prices as proof that the stock could be under or overvalued by the market.

8 0
3 years ago
Expected cash dividends are $4.00, the dividend yield is 8%, flotation costs are 6% of price, and the growth rate is 5%. Compute
Brut [27]

Explanation:

\text { Dividend, } \mathrm{D}= 4 \\\text { Dividend yield rate }=\mathrm{D} / \text { Current price }=8 % \\\text { Current price }, \mathrm{P} 0=\mathrm{D} / 8 \%=\$ 4 / 8 \%=$ 50

\text { Flotation cost, } \mathrm{F}=8 \% \text { of current price }=\$ 50 * 8 \%=\$ 4 \\
\text { Growth rate,g }=4 % \\
\text { Cost of new common stock, } \mathrm{Ke}=[\mathrm{D} 1 /(\mathrm{P} 0-\mathrm{F})]+\mathrm{g} \\  =[\$ 4 /(\$ 50-\$ 4)]+4 \% \\
=0.086956522+0.04 \\
=0.126956522=12.7 \% \text {(Rounded) }

12.7%

6 0
3 years ago
A. medical payment auto 1. covers insured for life; is paid on for a specific-
ivolga24 [154]

Answer:

E. property damage auto 5. pays if insured is at fault and someone else's-  

property is damaged

5 0
3 years ago
Read 2 more answers
In the process of brainstorming his goals, Robert realized his Web business was more about money than creativity. His decision t
Rasek [7]
From what I understand here, it is the company that will be creating the 5000 monthly income. This is an example of a specific measurable goal since the goal of Robert is to make sure that the monthly net income of his company would reach at least 5000. Since he is the boss of his company, this is also probably his personal mission for his company so that he will be motivated to keep on bringing his company to better heights. This will also probably motivate his employees to work harder as well.
4 0
3 years ago
Read 2 more answers
Assume that the seller owes $80,000 on a loan for the land. After receiving the $298,000 cash in (a), the seller pays the $80,00
geniusboy [140]

Answer:

1.   - $   80,000

2.  -  $  80,000

3.  -   $     0      -   No effect

Explanation:

1. Assets  

 - <em>80,000</em>  ( pay loan ) -  decrease

2. Liabilities

 - 80,000 ( loan from <em>+</em><em> 80,000 </em> to  <em>0</em> ) - decrease

3. Stockholders Equity: no change, as there was not result ( profit/loss ) nor    shareholder contribution/withdrawal

 

5 0
3 years ago
Other questions:
  • Each Component (Services/Agencies) uses the guidance provided by the Planning phase of the Planning, Programming, Budgeting, and
    15·1 answer
  • You buy a share of The Ludwig Corporation stock for $21.40. You expect it to pay dividends of $1.07, $1.1449, and $1.2250 in Yea
    15·1 answer
  • Suppose there is a large increase in the money supply in an economy that previously had low inflation. As a consequence, aggrega
    8·1 answer
  • FunZone Inc. identified and developed a SmartCard that can be used at fair grounds to make the ticketing process easier. The com
    13·1 answer
  • Ingredient lists on gum packages remain somewhat vague, even though these labels fall under federal regulations, because the man
    10·1 answer
  • Use the following information to answer the question about BobCat Co. at the end of 2017:
    11·1 answer
  • Amber McClain. Amber McClain, the currency speculator we met in the chapter, sells eight June futures contracts for 500,000 peso
    11·1 answer
  • The United Kingdom currently has a trade deficit with New Zealand. If the U.K. pound sterling appreciates relative to the New Ze
    15·1 answer
  • You are considering investing in a project with the following possible outcomes: States Probability of Occurrence Investment Ret
    14·1 answer
  • Selections, a general partnership, operates a gift shop. Selections has five partners. Tony has a one-third interest in the part
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!