Answer:
The investors should expect to 9.26% of Return.
Explanation:
The Dividend Discount Model for Constant Growth should be used here.
DDM = Current Price = Dividend of Year 1 / (Required Return - Growth Rate)
Dividend of Year 1 = 1.64 (1.03) = 1.6892.
Re-arrange the above model for Required Return and put values:
Required Return = (1.6892 / 27) + .03 = .0926 OR 9.26%.
Thanks!
Answer:
3.5%
Explanation:
We will apply asset pricing model to calculate cost of equity (required rate of return). The capital asset pricing model is stated as below:
Cost of equity = Risk-free rate + Beta x Market risk premium
Putting all the number together, we have:
Cost of equity (Beale) = 5.5% + 1.8 x (9% - 5.5%) = 11.8%
Cost of equity (Foley) = 5.5% + 0.8 x (9% - 5.5%) = 8.3%
Cost of equity (Beale) - Cost of equity (Foley) = 11.8% - 8.3% = 3.5%
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<em>Note: You can also do quick calculation as below:</em>
<em>Cost of equity (Beale) - Cost of equity (Foley) = (Beta of Beale - Bete of Foley) x Market risk premium = (1.8 - 0.8) x (9% - 5.5%) = 3.5%</em>
Answer:
start at the top of the command structure
Explanation:
Based on the scenario being described it can be said that the best solution to this would most likely be to start at the top of the command structure. This would allow you to go down the chain of command in order to find and stop the communication problem at the source. Which in doing so you will fix the problem completely, since the rest of the employees will begin to receive the correct information regarding the products.
The answer is D, opportunity costs.
