Answer:
Answer is given in the attachment.
Explanation:
Answer:
The price of the Stock today is $60.07. So option D is the correct answer.
Explanation:
The stock price of a company's stock whose dividends grow at two different growth rates can be calculated using the two stage Gordon growth model also known as the two stage DDM.
The short term growth rate or the growth rate that is for a limited time period is taken as g1. So, g1 is 15%
The sustainable growth rate which is the growth rate that will prevail forever is taken as g2. So, g2 is 10%
The price of the stock today is,
P0 = 1 * (1+0.15) / (1+0.12) + 1 * (1+0.150^2 / (1+0.12)^2 +
[ (1 * (1+0.15)^2 * (1+0.1) / (0.12 - 0.1)) / (1+0.12)^2 ]
P0 = $60.067 rounded off to $60.07
P1 = $27
P0 = $23
To solve:
Capital gain rate = (P1 - P0)/P0
Capital gain rate = ($27.00 - $23.00)/$23.00
Capital gain rate = $4/$23
Capital gain rate = 0.1739
Capital gain rate = (0.1739)(100)
Capital gain rate = 17.39%
Answer:
Their underlying asset beta is closest to is 1.08
Explanation:
According to the given data we have the following:
Debt is given as $78 billion
Equity is given as $142 billion
equity beta given as 1.68
Therefore, in order to calculate the underlying asset beta we would have to use the formula of the the equity beta for a levered firm as follows:
betaE =beta A [1 + (Debt / Equity)]
1.68 = \beta A [1 + ($78 B/ $142 B)]
1.68 = \beta A [1 + 0.5493]
betaA = 1.68 / 1.5493
betaA = 1.08
Their underlying asset beta is closest to is 1.08
Answer:
Accounting costs $145,000
Implicit costs $75,000
Opportunity costs $220,000
Explanation:
What her accounting cost will be during the first year of operation.
Based on the information given we were told that the annual overhead costs and operating expenses amounted to the amount of $145,000 which means that the amount of $145,000 will be the ACCOUNTING COSTS
Her IMPLICIT COSTS will be the amount of $75,000 which is the amount she earn in her current job per year.
Her OPPORTUNITY COSTS be the addition of both her Her accounting cost and implicit costs
Hence,
Opportunity cost=$145,000+$75,000
Opportunity cost=$220,000