Answer:
e. Portfolio P has the same required return as the market (rM).
Explanation:
The answer is e. Portfolio P has the same required return as the market (rM).
let's find the beta of the portfolio = 0.5 * 0.7 + 0.5 * 1.3 = 1.0
From the information above , the required return on the portfolio = risk free rate + beta * (Expected market return - risk free rate) = risk free rate + 1 * (Expected market return - risk free rate) = Expected market return.
The periodic dividend growth can be estimated by dividing the current dividend Di by the final dividend Di-1 and subtracting one from the outcome, then expressed in percentage.
PV=price=2/0=13.
<h3>
How do you calculate D1 in the dividend growth model?</h3>
The procedure simply is Terminal Value = (D1/(r-g)) where: D1 is the dividend anticipated to be received at the end of Year 1. R is the rate of recovery expected by the investor.
DPS = (total dividends settled out over a period - any special dividends) ÷ (shares outstanding).
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If Joshua asked the bank to help. The bank promised to lend a predetermined sum of money on demand. The sources of funding this scenario best illustrate is:<u> venture capital</u>.
<h3>
What is venture capital?</h3>
Venture capital can be defined as the process in which a financial institution tend to give out loans to small business owners that have potentials of making it big so as to enables the business to succeed or to grow higher.
Based on the scenario the funding tend to represent venture capital because Joshua is a small business owner that lack sufficient capital.
Therefore If the bank promised to lend a predetermined sum of money on demand. The sources of funding this scenario best illustrate is:<u> venture capital</u>.
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The complete question is:
When a new strain of the flu spreads across the country, Joshua, the owner of a small drugstore, decides to stock extra inventory of cold and flu medications. Lacking sufficient capital to purchase the extra inventory, Joshua asked the bank to help. The bank promised to lend a predetermined sum of money on demand. Which of the following sources of funding does this scenario best illustrate?
trade credit
initial public offering
venture capital
equity financing
line of credit
The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding. Hope this helps:)