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nasty-shy [4]
3 years ago
6

Nagel Equipment has a beta of 0.88 and an expected dividend growth rate of 4.00% per year. The T-bill rate is 4.00%, and the T-b

ond rate is 5.25%. The annual return on the stock market during the past 4 years was 10.25%. Investors expect the average annual future return on the market to be 14.75%. Using the SML, what is the firm's required rate of return
Business
1 answer:
valkas [14]3 years ago
7 0

Answer:

13.61 %

Explanation:

We have these information to answer the question

Risk free rate = 5.25

Beta = 0.88

Future return on market = 14.75

The formula for required rate of return

= Risk free rate + [ Beta * (future return on market - risk free rate)]

= 5.25 + [0.88(14.75-4.62)]

= 5.25 + (12.98-4.62)

= 5.25 + 8.36

= 13.61%

Therefore the firm's required rate of return = 13.61 %

Thank you!

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A company's strategy can best be described as a(n) _______ about what long-term goals or direction to pursue for the survival or
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Answer:C

Explanation:

Educated guess. Proper understanding of the environment helps to make informed decisions

4 0
3 years ago
Kitchen Convenience Company manufactures two productslong dashtoaster ovens and bread machines. The following data are​ availabl
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Answer:

Contribution margin per hour= $360

Explanation:

Giving the following information:

Bread Machines:

Sales price= $140

Variable costs= $50

Contribution margin per unit= $90

Kitchen Convenience can manufacture four bread machines per machine hour.

<u>To calculate the total contribution margin per hour, we need to multiply the number of bread machines produced in an hour for the unitary contribution margin.</u>

Contribution margin per hour= $90*4 units= $360

3 0
3 years ago
The growth of industrial manufacturing affected skilled tradesmen by:.
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removing control of their labor and their sense of independence.

8 0
2 years ago
Two or more products are produced using limited resources. The firm would like to determine how many units of each product it sh
inysia [295]

Answer: Product-mix

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From the given case/scenario, we can state that this situation describes the problem of product-mix. Product mix that is also known as or referred to as product assortment, tends to refer to total number of product/commodity lines that an organization offers to an individual or to its customers.There are four dimensions to an organization's product mix, these are length, width, consistency and depth.

3 0
3 years ago
The Herjavec Co. just paid a dividend of $1.85 per share on its stock. The dividends are expected to grow at a constant rate of
ycow [4]

Answer:

Current price : $24.05

Price in 3 years : $27.05

Explanation:

The Current stock price of Herjavec Co will be determined by the formula given below;

Po = [Do (1 + g) ] / (r - g)

Po = Current price

Do = Current dividend

r = Rate of return

g = growth of dividend

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Po = $24.05.

The stock price of Herjavec Co after 3 years will be determined by the formula given below;

P3 = Do (1 + g)^4 / (r - g)

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P3 = $27.05

5 0
4 years ago
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