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rusak2 [61]
3 years ago
7

Suppose two factors are identified for the U.S. economy: the growth rate of industrial production, IP, and the inflation rate, I

R. IP is expected to be 4% and IR 6%. A stock with a beta of 1 on IP and 0.7 on IT currently is expected to provide a rate of return of 12%. If industrial production actually grows by 5%, while the inflation rate turns out to be 8%, what will be your expected rate of return on the stock, given the new information about the industrial production rate and the inflation rate
Business
1 answer:
mash [69]3 years ago
7 0

Answer:

14.4%

Explanation:

Calculation for what will be your expected rate of return on the stock.

Expected rate of return on the stock=12% + 1(5%-4%) + .7(8%-6%)

Expected rate of return on the stock=12%+1(1%)+.7(2%)

Expected rate of return on the stock=12%+1%+1.4%

Expected rate of return on the stock=14.4%

Therefore your expected rate of return on the stock is 14.4%

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Vera_Pavlovna [14]

Answer:

<u>Using the Harrod-Domar growth equation</u>

Growth rate = Saving rate / Capital output ratio

Growth rate = 0.01 / 3

Growth rate = 0.003

Growth rate = 0.3%

Thus, the value of growth rate is 0.3%

When the incremental capital-output ratio is 3, to achieve the 5% growth rate, the gross saving rate is 0.24 or 24%

Exogenous growth: When the labor supply is perfectly elastic, then the exogenous does not allow any factor to substitute

Endogenous growth: When the labor supply is perfectly elastic, theem the exogenous does not lead to address the savings decision or sources of productivity growth.

8 0
3 years ago
porter jewelers, a sole proprietorship has a marginal tax rate of 32 percent and an average tax rate of 20.9 percent. if the fir
Vitek1552 [10]

The amount of Taxable income earned equals $164,258.37.

<h3>What is a Taxable income?</h3>

It refers to any gross income earned that is used to calculate the amount of tax you owe.

Taxable income = $34,330 / .209

Taxable income = $164,258.37

Therefore, the amount of Taxable income earned equals $164,258.37.

Read more about Taxable income

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6 0
2 years ago
What two activities are included in the preapproach stage of the personal selling process?
babymother [125]

Two activities that are included in the approach stage of the personal selling process are -

  • gathering information about potential customers.
  • deciding on the best method for an initial meeting.

The following is included in the approach stage of the personal selling process initial meeting to get the prospect's attention, which is the basis of the sales presentation. Orders are sales representatives who process recurring or back-ordered orders for products that the company has already sold.

Prepaid tasks include product training and prospect identification. Approach customers, identify customer needs, present products or services, answer questions or objections, close sales, and follow up after sales.

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8 0
2 years ago
Byron Books Inc. recently reported $13 million of net income. Its EBIT was $32.5 million, and its tax rate was 35%. What was its
Setler79 [48]

Answer:

Interest amount = $12,500,000

Explanation:

Earnings Before Tax:

= Net income ÷ (1 - T)

$13,000,000 ÷ 0.65

= $20,000,000

That is the income before tax.

Since EBIT was $32,500,000, the Interest is the difference between EBIT and the EBT which is shown as follows:

= $32,500,000 - $20,000,000

= $12,500,000

So, the interest amount = $12,500,000

5 0
3 years ago
a. Is it sustainable to think that Emiratis, which make up only about 15 percent of the people in Dubai, can be leading the city
Degger [83]

Answer: Yes, I do think that it is a sustainable goal.

Explanation:

The Emiratis may only make up 15% of the population in Dubai but they do believe in other nationalities and diversity. The Emiratis hire an estimated 160 nationalities to work for them in various professions. They do believe that this enriches the workforce.

The Emiratis do need to be keeping up with the times and doing more things for their employees such as more wages, awards, bonuses, paid time off, etc. This will show the employees and people in Dubai that the Emiratis are willing to advance with the times and are genuine with their fellow citizens.

5 0
3 years ago
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