Answer:
$5.73(Approx).
Explanation:
Given:
= 0.32
Growth rate = 25% = 0.25
Number of year = 4
Growth rate after 4 year = 3% = 0.03
Required rate of return = 15% = 0.15
Computation of divined in 4 year:
Price of stock after year 4 = [Divined in 4 year × (1 + new growth)] /[Required rate of return - Growth rate after 4 year ]
Price of stock after year 4 = [0.78125 × (1+0.03)] / [0.15 - 0.03]
Price of stock after year 4 = [0.8046875] / [0.12]
Price of stock after year 4 = $6.70572917
Present value = Future value / 
Present value = $6.70572917 / 
Present value = $6.70572917 / 
$5.73(Approx).
Answer:
The portfolio standard deviation is 14.82%
Explanation:
The portfolio standard deviation would be calculated by finding out the variance of the portfolio and taking the square root of it.
Variance of the portfolio = [(1 - .50)
x 0.25] + [0.50 x 0.16] + [2 x (1 - 0.50) x 0.50 x 0.25 x 0.16 x 0]
= [0.25 x 0.0625] + [0.25 x 0.0256] + [0]
= 0.015625 + 0.0064
VarPort = 0.022025
Std DevPort = √0.022025
Std DevPort = 0.1482 = 14.82 percent
<span>$104,500 * 0.04 = $4,180 - $665 = $3,515</span>
Answer:
retention ratio
Explanation:
Retention ration is the portion of net income retained by a firm to grow its business rather than being declared and paid as dividened.
When a company makes profit at the end of financial period, the company can either retain part of its earning for business expansion, declare part as dividends paid to shareholder or combine both.
Where a firm now reinvest the portion of the profit earned in itself, it is called retention ratio.
