Answer:
a. 1.27%
b. 15.24%
c. 16.35%
Explanation:
a. What is the monthly return on this investment vehicle?
The formula for the value of a Perpetuity is;
Value = Payment/ rate
Rate = Payment/ Value
Rate = 1,450/114,000
= 0.0127
= 1.27%
b. What is the APR?
APR is the annual rate. The above figure is the monthly rate.
APR = Monthly rate * 12
= 1.27 * 12
= 15.24%
c. What is the effective annual return?
Effective annual return = [1 + (APR/n)]^n – 1
n is the number of compounding periods which is 12 here for monthly compounding.
= [1 + (15.24%/12)]^12– 1
= 16.35%
Answer & Explanation:
In terms of completion of goals, the key difference between strategic aim and SWOT is the time-frame.
In this case, the strategic goal is future-oriented and long-term (around 10-20 years). The strategic goal is simply to make sure that the whole enterprise, in order to meet potential business demand, works on forecasting consumer demand in the future, reinforcing and enhancing its core competences.
On the other side, in implementing the corporate goals and achieving success, SWOT has a short-term outlook. In this context, SWOT focuses on current data and knowledge, such as specific expertise, current business demand and satisfying this need.
Answer:
read, relax, try to sleep in as long as I want, work out, and eat lol
have a good day :)
Explanation:
The required return on the company's stock given the growth rate and the dividend yield is 10.4%.
<h3>What is the required return?</h3>
The required return is the return that investors demand for investing in a stock. The more risky a stock is, the higher the return demanded by investors.
Required return = dividend yield + growth rate
4.6% + 5.8% = 10.40%
Answer:
$53
Explanation:
The computation of the stock sale at the end of the year is computed after calculating the required rate of return and the growth rate
The required rate of return by applying the Capital Asset Pricing model formula is
= Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
= 6% + 1.2 × (16% - 6%)
= 6% + 12%
= 18%
Now the growth rate is
Stock price = Dividend per share÷ (Required rate of return - growth rate)
$50 = $6 ÷ (18% - growth rate)
So, the growth rate is 6%
Now the ending stock price is
Next year dividend ÷ (Required rate of return - growth rate)
where,
Next year dividend is
= $6 + $6 × 6%
= $6 + 0.36
= $6.36
So,
= ($6.36) ÷ (18% - 6%)
= $53
