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a_sh-v [17]
3 years ago
5

10 points eBookItem 17Item 17 10 points Stock in Daenerys Industries has a beta of 1.01. The market risk premium is 10 percent,

and T-bills are currently yielding 3 percent. The company's most recent dividend was $1.6 per share, and dividends are expected to grow at a 6 percent annual rate indefinitely. If the stock sells for $33 per share, what is your best estimate of the company's cost of equity? rev: 09_20_2012
Business
1 answer:
kykrilka [37]3 years ago
3 0

Answer:

12.12%

Explanation:

The computation of the best estimate of the company cost of equity is as follows;

The required rate of return as per CAPM Is

= Risk free rate of return + beta × market risk premium

= 3% + 1.01 × 10%

= 13.1%

Now

Dividend growth model (r) is

=(($1.60 × 1.06) ÷ $33) + 0.06

= 11.14%

Now the best estimate would be

= (13.1% + 11.14%) ÷ 2

= 12.12%

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3 years ago
Which of the following is a likely reason for choosing FDI instead of licensing?
Romashka [77]

Answer:

The correct option is B

Explanation:

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Licensing means all the contracts to which the third part has granted or licensed any right to its subsidiaries or company.

So, the reason for preferring FDI instead of license is sharing the intellectual know how with the foreign rival might be risky as this is a limitation in licensing.

8 0
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Areas that once had vast economic growth and large amounts of industry, but are now suffering from the effects of outsourcing ar
Irina-Kira [14]

Answer:

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Explanation:

Deindustrialization refers to the  phase of social and economic event caused by the elimination or decrease of industrial base or operation in a region or country, in particular of manufacturing industries or mining. It's the reverse of being industrialised.

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Answer:

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Explanation:

Data provided

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Therefore for computing the cash received from customers we simply applied the above formula.

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