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Molodets [167]
3 years ago
12

Chelsea Fashions is expected to pay an annual dividend of $1.26 a share next year. The market price of the stock is $24.09 and t

he growth rate is 2.6 percent. What is the cost of equity
Business
1 answer:
tekilochka [14]3 years ago
6 0

Answer:

7.83%

Explanation:

This is calculated by using the Gordon growth model (GGM) formula as follows: P = d / (r - g) ……………………………………… (1)

Where;

P =  market price of the stock = $24.09

d = next year annual dividend = $1.26 r = cost of equity = ?

g = dividend growth rate = 2.6%, or 0.026

Substituting the values into equation and solve for r, we have:

24.09 = 1.26 / (r - 0.026)

24.09 (r - 0.026) = 1.26

24.09r - 0.62634 = 1.26

24.09r = 1.26 + 0.62634

24.09r = 1.88634

r = 1.88634 / 24.09

r = 0.0783038605230386, or 7.83038605230386%

Rounding to 2 decimal places. we have:

r = 7.83%

Therefore, the correct option is 7.83 percent.

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Jim Angel holds a $200,000 portfolio consisting of the following stocks: Stock Investment Beta A $50,000 1.20 B $50,000 0.80 C $
Alik [6]

Answer:

Option (c) is correct.

Explanation:

Jim Angel holds a $200,000 portfolio

Weight of stock-A is as follows:

= Investment of stock A ÷ Total investment

= $50,000 ÷ $200,000

= 0.25

Therefore,

Portfolio beta:

= (0.25 × 1.20) + (0.25 × 0.80) + (0.25 × 1.00) + (0.25 × 1.20)

= 0.3 + 0.2 + 0.25 + 0.3

= 1.05

Therefore, the portfolio's beta is 1.05.

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3 years ago
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zzz [600]

Answer:

market?

Explanation:

cause in the end it says sell them

6 0
3 years ago
Read 2 more answers
Universal Containers has two sales groups. Each group has its own unique sales process. What is the best way to ensure that sale
Gre4nikov [31]

Answer:

The use of a proper CRM.

Explanation:

A CRM basically means or translate to a Customer Management System.

A customer management system is an Information technology tool or software that enables companies to properly manage track and monitor their interactions and relationship with clients or potential customers.

Referring back to the question asked, the best answer to the question is to categories or segment the customer management system into teams and generate a unique assess code such that only the team working on a particular potential customer can access and monitor the status of interaction between a sales person and a customer within the same sales team.

This way, a third party sales team does not have access to the data of other sales team.

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Natalka [10]

operations management is considered to be doing a great job when you are able to lead your crew and make sure all of the inventory is in order.
8 0
3 years ago
Where does AJ’s dad find AJ’s phone? A. Floor B. Board C. Passenger Side D. Behind the dashboard
Lunna [17]

Answer:

The AJ's dad finds AJ's phone:

D. Behind the dashboard

Explanation:

  • This question is from Impact Texas Young Drivers Program's video to raise the awareness in the younger generation about driving carefully.
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