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bija089 [108]
3 years ago
15

Westsyde Tool Company is expected to pay a dividend of $1.50 in the upcoming year. The risk-free rate of return is 6%, and the e

xpected return on the market portfolio is 14%. Analysts expect the price of Westsyde Tool Company shares to be $29 a year from now. The beta of Westsyde Tool Company's stock is 1.2. Using the CAPM, an appropriate required return on Westsyde Tool Company's stock is ________. (Hint: CAPM expected return is the required return) 8% 16.8% 15.6% 10.8%
Business
1 answer:
Julli [10]3 years ago
4 0

Answer: 15.6%

Explanation:

The Capital Asset pricing model allows for us to calculate the required return on a stock using the risk free rate, the market premium and the beta of the stock.

Using the Capital Asset Pricing Model, the required return is calculated by the formula:

Required return = Risk free rate + Beta * (Market return - Risk free rate)

= 6% + 1.2 * (14% - 6%)

= 15.6%

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Other than interest payments, what is another way that you can make money buying bonds
erica [24]

Answer:

Capital Gain

Explanation:

The second way of making money from buying bonds is to sell them at a higher price than you bought them. Like other securities, bond prices fluctuate due to several factors. If the company that sold you the bold is performing well, the bonds will gain in value. Selling the bonds through a broker will result in profits.

For example, If you bought bonds worth $5000 at face value, it means you paid $5000 for them. If the market value increase to $6000, selling the bonds will make you a profit of $1000

8 0
3 years ago
Bramble Vita produces a wide range of herbal supplements sold nationwide through independent distributors. In response to an inc
kiruha [24]

Answer and Explanation:

The Statement showing the amount and the timing of all the cash Flow of Burger is shown below:-

Year      Particulars                                             Amount

0            Cost of new machine                                       ($176,300)

0            Additional installation cost of new machine   ($3,275)

0            Sales of old machine                                          $13,150

1-3          Savings in overhaul cost of old machine           $11,550

1-10        Saving in variable cost                                        $25,800

           (258,000 × ($11.90 - $11.80)

10          Salvage value of new machine                            $3,730

8 0
3 years ago
When the laptop market overtook the desktop market, blue tech inc., a leader in desktop technology, was left at a competitive di
Sedaia [141]

In this scenario, Blue Tech Inc.'s failure can be best attributed to <u>"Time compression diseconomies."</u>


We accept time compression diseconomies where the snappier a firm builds up the asset, the higher the improvement cost. We demonstrate that time compression diseconomies normally offer ascent to asset heterogeneity and henceforth upper hand in that one firm builds up the asset quicker than the other. We evaluate the supportability of the upper hand, determine conditions  

under which the asset is "incomparable" and demonstrate that firm benefits are nonmonotonic in the degree of time compression  diseconomies.

5 0
3 years ago
Reflecting on the past ten weeks, specify what you believe are the two most important concepts you have learned in this course.
Mariulka [41]

Explanation:

The administration course contributed with several essential concepts for the work and career of every professional.

In my opinion, the two most important concepts learned in this course were the development of marketing plans and management of social media.

Learning about the strategic importance of implementing a marketing plan will help the professional to understand the crucial steps in the development of the product and its phases until reaching the end customer. Another essential learning was social media, which is a worldwide trend in building customer and company relationships and cannot be ignored nowadays, through this new channel companies are able to establish a relationship marketing capable of creating value for the brand and increasing customer loyalty.

6 0
3 years ago
The four components of planned aggregate expenditure are: A. spending on domestic goods, domestic services, foreign goods, and f
ASHA 777 [7]

Answer:

D.

Explanation:

Aggregate Planned Expenditure (AE) can be defined as the sum value of all the finished products and services in an economy. This value is calculated by adding all the expenditures that are considered in an economy. These components are household consumption (C), planned investments (I), Government expenditures or purchases (G), and net exports (NX) [net exports is the difference between the total exports and total imports].

<u>The sum value or the aggregate planned expenditure is calculated by adding all these components</u>.  

So, the correct answer is option D.

6 0
4 years ago
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