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jenyasd209 [6]
3 years ago
7

"Given the following information from Cullumber Corporation, what price would the CAPM predict that the company’s stock will tra

de for one year from today? (Do not round intermediate calculations. Round final answer to 2 decimal places, e.g. 50.75.) Risk free rate: 3.6 % Market risk premium: 8.6 % Beta: 0.65 Current stock price: $64.60 Annual dividend: $1.84"
Business
1 answer:
Natasha_Volkova [10]3 years ago
5 0

Answer:

$68.70

Explanation:

Risk free rate: 3.6 %

Market risk premium: 8.6 %

Beta: 0.65

Current stock price: $64.60

Annual dividend: $1.84

The expected rate of return = 3.6% + 0.65*8.6%

The expected rate of return = 0.036 + 0.0559

The expected rate of return =  0.0919

The expected rate of return = 9.19%

Required return = (P1-P0+Dividends)/P0

9.19% =  [(Price + 1.84)/64.60 ] - 1

9.19% + 1 = (Price + 1.84)/64.60

64.60*(0.0919 + 1) = Price + 1.84

70.53674 = Price + 1.84

Price = 70.53674 - 1.84

Price = $68.69674

Price = $68.70

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7 0
3 years ago
Under a job-order costing system, the dollar amount transferred from Work in Process to Finished Goods is the sum of the costs c
zheka24 [161]

Answer: completed in the period

Explanation:

Job order costing system refers to the system when small batches of the products are ordered by the customers. It is useful in knowing the cost that's used in the manufacturing of each product.

It's usually used when different products are being produced and the cost for each individual job need to be calculated. Under a job-order costing system, the dollar amount transferred from Work in Process to the finished goods will be the sum of the costs that's charged to all jobs that are completed in the period.

6 0
3 years ago
Between April 2011 and April 2016, the price of a U.S. postage stamp increased from $0.41 to $0.46. The price of a U.S. postage
koban [17]

Answer:

The price of a U.S. postage stamp has increased approximately <u>63%</u> in terms of Indian rupees and <u>10%</u> in terms of Chinese yuan.

Explanation:

the exchange rate between the US dollar and the Indian rupee:

April 2011 = 45.54 Indian rupees per  dollar x $0.41 = 18.67 Indian rupees

April 2016 = 66.16 Indian rupees per  dollar x $0.46 = 30.43 Indian rupees

change in Indian rupees = (30.43 - 18.67) / 18.67 = 63%

the exchange rate between the US dollar and the Chinese yuan:

April 2011 = 6.61 Chinese yuan per  dollar x $0.41 = 2.71 Chinese yuan

April 2016 = 6.48 Chinese yuan per  dollar x $0.46 = 2.98 Chinese yuan

change in Chinese yuan = (2.98 - 2.71) / 2.71 = 10%

8 0
3 years ago
The City of Fargo issued general obligation bonds to finance construction of a new fire station. The bonds were issued at a prem
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Answer:

The correct answer is (c)

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Bonds and stocks are used to generate financing. The city of Fargo has issued bonds to finance the construction of a new fire station. The bond is a type of debt funding and the premium must be transferred to a debt service fund. A debt service fund will be used to pay out the principal payments on those bonds.

5 0
3 years ago
Peter, a British citizen, and Keith, a U.S. citizen, are employees of an electronics manufacturing company headquartered in Lond
valina [46]

Answer:

The correct answer is option B.

Explanation:

An electronics manufacturing company is headquartered in London. It has a marketing unit in New York.  

Peter is a British resident, who works in the London office of the company. Keith is a US citizen and works in the New York marketing unit.  

Since the company is headquartered in London, its parent country is Britain. The US is a host country for the company.  

So Peter is a parent country national and Keith is host country national.

6 0
3 years ago
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