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3 years ago

A stock has an HPR of 9%. The expected dividend yield is 3%.

Business

1 answer:

Arte-miy333 [17]3 years ago

3 0

Answer:

b. False

Explanation:

holding period return = [dividends received + (ending value - initial value)] / initial value

9% = [dividends received + (ending value - initial value)] / initial value

dividend yield = dividend / ending value

3% = dividend / ending value

price appreciation = (ending value / initial value) - 1

1.12 = ending value / initial value

ending value = 1.12 initial value ⇒ WE REPLACE IN THE HPR ANN DY FORMULAS

3% = dividend / 0.12 initial value

dividend = 0.36 initial value

9% = [dividends received + (1.12 initial - initial value)] / initial value

9% = dividends received + (0.12 initial value / initial value)

9% = dividends received + 12%

9% = 0.36 initial value + 12%

-3% = 0.36 initial value ⇒ THIS CANNOT BE TRUE, SO THE QUESTION MUST BE FALSE

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What effect will each of the following have on the demand for small automobiles such as the Mini-Cooper and Fiat 500?

icang [17]

Answer:

a. Demand will increase.

b. Demand will increase.

c. Demand will increase.

d. Demand will decline.

e. Demand will increase.

Explanation:

a. If small automobiles become more fashionable, people will prefer them more. This will lead to an increase in demand for autos.

b. If there is an increase in the price of large automobiles and the price of the small automobiles remain the same, people will prefer the cheaper substitutes. This will cause the demand for small automobiles to increase.

c. Inferior goods have a negative income effect. SO, when income declines the demand for small autos will increase and vice versa.

d. If consumers expect the price of small autos to fall in the near future, they will hold their money to buy autos when their price fall. This will cause the current demand to fall.

e. When the price of gasoline drops it will become cheaper to use autos. This will lead to an increase in demand for autos.

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2 years ago

Read 2 more answers

What are operating expenses?

skad [1K]

Answer:

see below

Explanation:

Operating expenses are the cost a business incurs while engaging in its normal business operations. They are the costs not directly be attached to the production process. A business incurs operating expenses in managing it day to day activities. They exclude one time expenses such as judgment cost, accounts adjustments, and other non-recurring costs.

Operating expenses are classified into administrative, selling, and general expenses. Businesses cannot avoid operating expenses; hence the management should strive to keep them as low as possible. Examples of operating expenses include rent, salaries, employee benefits, transport, depreciation, repairs, taxes, sales commissions, amortization, and pension contributions.

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3 years ago

The average ticket price for a concert at the opera house was $50. The average attendance was 2500. When the ticket price was r

Ber [7]

Answer:

The price per ticket should be $37.5

Explanation:

First we need to determine the change in demand (attendance) as a result of every $1 increase in the price of ticket.

The ticket price increased by $4 (from 50 to 54) and the demand fell by 400 (from 2500 to 2100). The change per dollar is, 400 / 4 = 100.

So, for every $1 increase in price, demand falls by 100.

The revenue is calculated by multiplying price by quantity demanded. Revenue equation will be,

Let x be the change in price from $50.

Revenue = (50 + x) * (2500 - 100x)

Revenue = 125000 - 5000x + 2500x - 100x²

Revenue = 125000 - 2500x - 100x²

To calculate the price that maximizes the revenue, we need to take the derivative of this equation.

d/dx = 0 - 1 * 2500x° - 2 * 100x

0 = -2500 - 200x

2500 = -200x

2500 / -200 = x

-12.5 = x

Price should be 50 - 12.5 = 37.5

At price $37.5 the revenue of the Opera House is maximized.

6 0

3 years ago

g The company plans a 4-for-1 stock split. How many shares will you own and what will the share price be after the stock split?

Nata [24]

Answer: 14,400; $17

Explanation:

Stock splits are a strategy by firms to increase the liquidity of their shares especially when they are trading at a high price. The firm divides the stock by a certain number thus increasing the number of shares by the multiple of the number. This action will divide the price of the stock and thus allow for more trade as they are cheaper.

A 4-for- stock split means that each share will become 4.

Your total number of share will become;

= 4 * 3,600

= 14,400 shares

The new price will be;

= 68/4

= $17 per share

7 0

2 years ago

Julie and Barry Spinos purchased a house for $96,400. They made a 25 percent down payment and financed the remaining amount at 5

Alinara [238K]

Answer: $79.30

Explanation:

Cost of the house = $96400

Down payment = 25% × $96400 = $24100

Mortgage = $96400 - $24100 = $72300

Interest = 5.5%

Time = 5 years

Monthly payment.= $410.66

The interest for first payment will be:

= $72300 × 5.5% × 1/12

= $72300 × 0.055 × 0.08333

= $331.36

Therefore, the amount of the first monthly payment is used to reduce the principal will be:

= $410.66 - $331.36

= $79.30

5 0

2 years ago