Answer:
Price lowers and becomes negative or -5.37 dollars
Explanation:
Market risk premium's formula could be written as dividends/price + dividend's growth rate. Therefore, we dividend growth rate according to the current price and dividend level equal to market risk premium - dividends/price or 0.15 - 1/15.43 = 0.086 or 8.6%. If the dividend growth rate rises by 25% than new one is 33.6%. Price is equal to dividends/market risk premium - dividend growth rate or in this case 1/0.15-0.336 or 1/-0.186 or -5.37 dollars. If the price is negative that would mean that any future selling of the stock would mean that ABC would have to pay in order to sell it.
I believe the answer is -A!
Have a Warm and Wonderful Day!!
Answer:
The answer is the internal rate of return on this investment is 10%.
Explanation:
The internal rate of return is the discount rate bringing the present value of the perpetual stream of cash inflows equal to its initial investment which is $210.
We apply the formula for calculating the present value of growing perpetuity to find out the internal rate of return, which is denoted as X in the below equation:
10.5/ ( X - 5%) = 210 <=> X - 5% = 10.5 / 210 = 5% <=> X = 5% + 5% = 10%.
So, the internal rate of return on this investment is 10%.
Answer:
The lowest risk combination is at : expected return = 12%
standard deviation = 17.44%
Explanation:
Three mutual funds
stock fund : 15% expected return, 23% standard deviation
Bond fund : 9% expected return , 23% standard deviation
money market : sure rate of 5.5%
correlation between stock and bond fund = 0.15
variance for stock fund = 0.5 ( solved using excel )
variance for bond fund = 1 - variance for stock = 1 - 0.5 = 0.500
attached below is the table and
Answer:
A business continuity document
Explanation:
A business continuity plan document helps protect a business from the impact of potential crises that may affect their operations.
It is very important for small businesses to have this written document.
Carla's business continuity plan document should detail:
1. the key business functions needed to get operating as quickly as possible and the resources needed to do so if there's an attack.
2. identify potential crises that might affect the business and also determine how to minimise the risks of these disasters occurring.
Since training has been given to staffs before about their responsibilities in an emergency situation, they should apply what they've learnt.
For example, if there's a possibility for an attack that may affect power supply, Carla should put a back-up generator in place, in the event of a failure.
