Answer:
Option (e) is correct.
Explanation:
Given that,
Beta = 0.88
Expected dividend growth rate = 4.00% per year
T-bond rate = 5.25% (The treasury bonds are always the risk free rate)
Average annual future return on the market = 14.75%
Required rate of return:
= Risk free rate + Beta × (Market rate - Risk free rate)
= 5.25 + 0.88 × (14.75 - 5.25)
= 5.25 + 0.88 × 9.5
= 5.25 + 8.36
= 13.61%
Answer:
Future value= $151,018.51
Explanation:
Future value of money measures how much a present amount of money will be in the future at a given interest rate.
The interest gained on money shows the time value of money. One dollar today is less than one dollar in one year's time
The formula for future value is
Future value = Present value * (1 + rate)^time
As we have two periods in this case (10 years and 20 years)
Future value = Present value * {(1 + rate1)^time1} * {(1 + rate2)^time2}
Future value = 12,500 * {(1 + 0.07)^10} * {(1 + 0.095)^20}
Future value= $151,018.51
Answer: The risk of stock out = 2.94%
Explanation:
Reorder point is calculated as: Lead time*demand per unit time=45*9=405
While the amount on-hand reaches 422 pounds, the manager was reordering lubricant.
During the lead time, Standard Deviation of Demand =Daily S.D*(Lead time)^0.5=3*(9^0.5)=9
Risk of Stock Out=(422-405)/9 S.D=1.89 S.D
From Normal distribution curve 1.89 S.D=0.0294=2.94%
Therefore, the risk of stock out=2.94%
Answer:
D- All of the above
Explanation:
Edg. 2021, took the test and got 100 percent
