Surgical Supplies Corporation just Paid a $1.67 dividend last year. The dividend is expected to grow at growth rate of 20 percent over the next three years. It will then grow at normal and constant rate of 5 persent for the foeseeable future. Assuming a required rate of return of 12%, compute the price of the stock.

Answers

Answer 1

The price of the stock is $100.32.

How can we find the stock price?

Using the dividend discount model:

P = D / (r - g)

where P is the price of the stock, D is the dividend, r is the required rate of return, and g is the growth rate.

For the first three years, the dividends are:

D1 = D0 * (1 + g) = $1.67 * (1 + 0.20) = $2.004

D2 = D1 * (1 + g) = $2.004 * (1 + 0.20) = $2.4048

D3 = D2 * (1 + g) = $2.4048 * (1 + 0.20) = $2.88576

After year 3, the dividend will grow at a constant rate of 5% per year. Thus, the next dividend after year 3 is:

D4 = D3 * (1 + 0.05) = $2.88576 * 1.05 = $3.03005

The required rate of return is 12%, so:

r = 0.12

Now, we can use the formula to calculate the price of the stock:

P = ($2.004 / (1 + 0.12)^1) + ($2.4048 / (1 + 0.12)^2) + ($2.88576 / (1 + 0.12)^3) + ($3.03005 / (0.12 - 0.05) / (1 + 0.12)^3)

P = $2.004 / 1.12 + $2.4048 / 1.2544 + $2.88576 / 1.4049 + $3.03005 / (0.12 - 0.05) / 1.4049

P = $1.7857 + $1.9161 + $2.0559 + $94.5632

P = $100.3209

Therefore, the price of the stock is $100.32.

Learn more about stock

brainly.com/question/31476517

#SPJ11


Related Questions

which is not a type of promotion? select one: a. sales promotions b. advertising c. public relations d. personal presentation

Answers

Answer: Sales promotion.

Explanation: just trust.

true or false: when a nation is too small to affect world prices, allowing free trade will have a non-negative effect on total surplus in that country, regardless of whether it imports or exports as a result of international trade.

Answers

When a nation is too small to affect world prices, allowing free trade will have a non-negative effect on total surplus in that country, regardless of whether it imports or exports as a result of international trade.

This is because free trade allows a country to specialize in producing goods that it can produce most efficiently, while importing goods that other countries can produce more efficiently.

This specialization leads to increased efficiency, which results in lower prices for consumers and higher profits for producers. Lower prices increase consumer surplus, while higher profits increase producer surplus.

Additionally, free trade leads to increased competition, which also contributes to lower prices and increased efficiency. Increased competition encourages businesses to reduce their prices and improve their quality, which benefits consumers.

Therefore, even if a country imports more than it exports, it can still benefit from free trade in the form of increased efficiency, lower prices, and higher total surplus. In conclusion, free trade can benefit small nations by increasing efficiency, lowering prices, and increasing total surplus, regardless of whether they import or export.

To know more about prices refer home

https://brainly.com/question/19091385#

#SPJ11

The Aluminum Company of America (Alcoa) has faced limited competition in the market for aluminum. What barrier has kept new firms from entering the market for aluminum? The Aluminum Company of America (Alcoa) A. has had lower long-run average costs than competitors. B. has had a patent on aluminum C. has had almost exclusive ownership of bauxite, which is a key input. D. has been able to convince customers that its brand of aluminum has extra value. E. has enjoyed economies of scope from producing multiple types of products.

Answers

The barrier that has kept new firms from entering the market for aluminum and limited competition for Alcoa is that they have almost exclusive ownership of bauxite, which is a key input in the production of aluminum.

This has made it difficult for new firms to enter the market and compete with Alcoa, as they would face higher costs for obtaining the necessary inputs. While Alcoa may also have lower long-run average costs and economies of scope from producing multiple types of products, the ownership of bauxite is the primary barrier to entry in the aluminum market.
The barrier that has kept new firms from entering the market for aluminum and allowed The Aluminum Company of America (Alcoa) to face limited competition is C. Alcoa has had almost exclusive ownership of bauxite, which is a key input in the production of aluminum. This has made it difficult for potential competitors to enter the market and compete effectively with Alcoa.

Learn more about market here:

https://brainly.com/question/13414268

#SPJ11

The barrier that has kept new firms from entering the market for aluminum, where the Aluminum Company of America (Alcoa) has faced limited competition, is the almost exclusive ownership of bauxite. Option C

Bauxite is the primary source of aluminum, and Alcoa has been able to secure a significant portion of the world's bauxite reserves. This has given them an advantage over competitors because they can produce aluminum at a lower cost, which is essential in a commodity market like aluminum.
Having access to a significant portion of the world's bauxite reserves allows Alcoa to achieve economies of scale, which is crucial in a commodity market. This allows them to produce large quantities of aluminum at a lower cost per unit than their competitors. As a result, new firms have found it challenging to enter the market and compete with Alcoa, given the high entry costs.
Furthermore, Alcoa has also enjoyed economies of scope from producing multiple types of products, which has allowed them to spread their fixed costs over a broad range of products, further lowering their long-run average costs. This has made it challenging for new firms to compete with them, given their cost advantage.
In conclusion, the almost exclusive ownership of bauxite, which is a key input, has been the primary barrier that has kept new firms from entering the market for aluminum, where Alcoa has faced limited competition. The ownership of bauxite has allowed Alcoa to achieve economies of scale and scope, which has given them a cost advantage over their competitors, making it challenging for new firms to compete in the market.Therefore option C is correct.

For more such questions on market https://brainly.com/question/25369230

#SPJ11

the fact that 2 very different companies -- walmart and nordstrom -- are successful in the retail industry can be explained by: group of answer choices economies of scale strategic positioning attractive industry conditions excellent leadership

Answers

Answer:Successful price warriors

Explanation:

stay ahead of bigger rivals by using several tactics: They focus on just one or a few consumer segments; they deliver the basic

xyz operates indoor tracks. the firm is evaluating the santa fe project, which would involve opening a new indoor track in santa fe. during year 1, xyz would have total revenue of $167,000 and total costs of $78,100 if it pursues the santa fe project, and the firm would have total revenue of $149,000 and total costs of $73,200 if it does not pursue the santa fe project. depreciation taken by the firm would be $75,500 if the firm pursues the project and $36,100 if the firm does not pursue the project. the tax rate is 44.80%. what is the relevant operating cash flow (ocf) for year 1 of the santa fe project that xyz should use in its npv analysis of the santa fe project? $19,417.60 (plus or minus $1) $44,300.00 (plus or minus $1) $24,882.40 (plus or minus $1) $32,517.60 (plus or minus $1) none of the above is within $1 of the correct answer

Answers

The relevant operating cash flow (OCF) for year 1 of the Santa Fe project is $46,629.20.

None of the given options is within $1 of the correct answer, so the correct choice is "none of the above."

How to calculate the relevant operating cash flow (OCF)

To calculate the relevant operating cash flow (OCF) for year 1 of the Santa Fe project, we need to first find the incremental earnings before interest and taxes (EBIT), then adjust for taxes and add back the depreciation.

Incremental EBIT = (Revenue with project - Costs with project) - (Revenue without project - Costs without project)

Incremental EBIT = ($167,000 - $78,100) - ($149,000 - $73,200) = $88,900 - $75,800 = $13,100

Now, calculate the incremental taxes: Incremental taxes = Incremental EBIT * Tax rate

Incremental taxes = $13,100 * 0.4480 = $5,870.80

Next, find the incremental net income:

Incremental net income = Incremental EBIT - Incremental taxes

Incremental net income = $13,100 - $5,870.80 = $7,229.20

Finally, calculate the relevant OCF by adding back the incremental depreciation:

Incremental depreciation = Depreciation with project - Depreciation without project

Incremental depreciation = $75,500 - $36,100 = $39,400

Relevant OCF = Incremental net income + Incremental depreciation

Relevant OCF = $7,229.20 + $39,400 = $46,629.20

Learn more about operating cash flow (OCF) at

https://brainly.com/question/18513143

#SPJ11

What about Kraft Heinz. They currently pay an annual dividend of $3.32 and we expect that to grow at a constant rate of 2.2% Assuming the market requires a(n) 8.0% return from Kraft Heinz, what is their stock worth?

Answers

According to given assumptions, the stock worth of Kraft Heinz is $56.94.

How to calculate the stock worth of  Kraft Heinz?

To calculate the stock value of Kraft Heinz, we can use the dividend discount model (DDM). According to DDM, the intrinsic value of a stock is equal to the present value of all its future cash flows, which in the case of a dividend-paying stock is the sum of all future dividends.

The formula for the stock value using DDM is:

Stock Value = Dividend per share / (Required Rate of Return - Dividend Growth Rate)

Using the given information, we can plug in the numbers:

Dividend per share = $3.32

Dividend growth rate = 2.2%

Required rate of return = 8.0%

Stock Value = $3.32 / (8.0% - 2.2%) = $56.94

Therefore, based on the given assumptions, the stock of Kraft Heinz is worth $56.94. It is important to note that this is an estimate based on several assumptions and that actual stock prices may differ from this calculated value.

Learn more about Kraft Heinz

brainly.com/question/25041044

#SPJ11

What type of stock does a large company issue?
A large company issues
stock. The company selling the stock often distributes profits by issuing
to its shareholders.

Answers

Common stock, which reflects the company's ownership and gives shareholders voting rights, is often issued by major corporations.

What do you mean by common stock?

Moreover, the business may also issue company shares, which is entitled to dividends and assets in the case of a liquidation before common stock.

A security that symbolises ownership in a firm is called common stock. Common stock owners choose the directors of the company and cast ballots for corporate rules. Long-term rates of return are often higher with this type of stock ownership. In the UK as well as other Commonwealth nations, they are referred to as equity capital or ordinary shares.

To know more about common stock visit:

https://brainly.com/question/17134911

#SPJ1

what is the difference between the cash paid for interest and the interest expense on a bond called?

Answers

The difference between the cash paid for interest and the interest expense on a bond is called: the amortization of bond discount or amortization of bond premium.

To provide a better understanding, let me explain these terms step by step:

1. Cash paid for interest: This is the actual cash amount paid by the bond issuer to bondholders as interest, typically semi-annually. It is calculated using the bond's face value and the stated (nominal) interest rate.

2. Interest expense: This is the total cost of borrowing that a company records in its financial statements. It is calculated using the bond's carrying value (face value +/- bond discount/premium) and the market (effective) interest rate.

3. Bond discount or premium: When a bond is issued, it may be sold at a discount (less than face value) or at a premium (more than face value). This occurs when the stated interest rate is lower or higher than the market interest rate, respectively.

4. Amortization of bond discount/premium: This refers to the process of gradually reducing the bond discount or premium over the life of the bond. It results in a difference between the cash paid for interest and the interest expense.

To summarize, the difference between the cash paid for interest and the interest expense on a bond is called the amortization of bond discount or bond premium.

It arises due to the gradual reduction of bond discount or premium over the life of the bond, and this difference helps align the bond's carrying value with its face value by the bond's maturity date.

To know more about amortization, refer here:

https://brainly.com/question/29216555#

#SPJ11

property managers must recognize the federally protected classes under ada and the federal fair housing act. which list most accurately lists these classes?

Answers

Property managers must recognize the federally protected classes under the ADA and the Federal Fair Housing Act.

The most accurate list of these classes includes race, color, national origin, religion, sex, familial status, and disability. It is important for property managers to be knowledgeable about these protected classes to ensure fair and equal treatment of all tenants and to avoid any potential discrimination lawsuits.In cases involving discrimination in mortgage loans or home improvement loans, the Department may file suit under both the Fair Housing Act and the Equal Credit Opportunity Act.  The Department brings cases where there is evidence of a pattern or practice of discrimination or where a denial of rights to a group of persons raises an issue of general public importance. Where force or threat of force is used to deny or interfere with fair housing rights, the Department of Justice may institute criminal proceedings.

To know more about ADA

https://brainly.com/question/9846277

#SPJ11

Exercise 5 (5 points) You have a portfolio consisting of two stocks A and B, According to portfolio theory: a) what would the risk of this portfolio depend on? b) under what condition would your portfolio reach the maximum level of risk? c) under what condition would your portfolio achieve the minimum level of risk?

Answers

a) The risk of a portfolio depends on the correlation between the stocks, individual volatility, and weightings in the portfolio.

b) The portfolio's risk is maximum when the two stocks are perfectly positively correlated.

c) The portfolio's risk is minimum when the two stocks are perfectly negatively correlated.



a) The risk of a portfolio consisting of two stocks A and B would depend on several factors, including the correlation between the two stocks, the individual volatility of each stock, and the weightings of each stock in the portfolio. The risk of a portfolio is typically measured by its standard deviation or variance.


b) Your portfolio would reach the maximum level of risk when the two stocks are perfectly positively correlated, meaning they move in the same direction at the same time.

In this case, the portfolio's risk would not be reduced through diversification, and any increase in the volatility of one stock would be mirrored in the other, leading to a higher overall risk.


c) On the other hand, your portfolio would achieve the minimum level of risk when the two stocks are perfectly negatively correlated, meaning they move in opposite directions at the same time. In this case, the volatility of one stock would be offset by the other, resulting in a lower overall risk for the portfolio.


To know more about portfolio click here:

https://brainly.com/question/29803678

#SPJ11

what type of question can be best answered with prescriptive analytics? what happened? what will happen? what should i do? what caused a problem to occur?

Answers

Prescriptive analytics is a type of data analysis that focuses on providing advice on what actions to take based on data analysis. This type of analysis is best suited for questions that ask "What will happen?" or "What is likely to happen?".

It is best suited for questions that ask, "What should I do?" or "What actions should be taken?" These types of questions require prescriptive analytics because they involve decisions that need to be made based on the available data.

Prescriptive analytics is particularly useful in identifying the root cause of problems that have already occurred. For example, if a company has experienced a decline in sales, prescriptive analytics can help identify the factors that contributed to the decline and suggest actions to take to reverse the trend.

Prescriptive analytics can also be used to predict future events and provide recommendations on what actions to take to maximize a positive outcome. This type of analysis is best suited for questions that ask "What will happen?" or "What is likely to happen?".

In summary, prescriptive analytics is best suited for questions that require decision-making based on available data and that involve identifying the root cause of a problem, predicting future events, and providing recommendations for action.

For more questions on: analytics

https://brainly.com/question/29749208

#SPJ11

doug invested $4,000 into certificate of deposit earning 6% interest, how long will it take to double doug’s investment

Answers

It would take approximately 12 years for Doug's investment to double.

To calculate the time it takes for Doug's investment to double, we can use the rule of 72, which states that the number of years it takes for an investment to double is approximately 72 divided by the annual interest rate (assuming compound interest).

nvestment refers to the allocation of money or resources in the hope of generating future income or profit. It can take many forms, including stocks, bonds, real estate, commodities, and mutual funds. The goal of investing is to earn a return on the invested funds, which can be achieved through capital appreciation, dividends, or interest payments. However, investing always carries some level of risk, and investors must carefully consider their investment objectives, risk tolerance, and time horizon before making any investment decisions.

In this case, Doug invested $4,000 at 6% interest rate, so the calculation would be:

72 / 6 = 12

So it would take approximately 12 years for Doug's investment to double.

To know more about interest here

https://brainly.com/question/25720319

#SPJ1

explain the wherewithal-to-pay concept, and how this concept sometimes overrides the financial accounting treatment of a particular item.

Answers

The wherewithal-to-pay concept is a principle used in tax law to determine the tax liability of a taxpayer. It focuses on the taxpayer's ability to pay taxes rather than the actual payment of taxes. The concept may override the financial accounting treatment of a particular item when for example, a company may have recorded a revenue item in its financial statements, but if they do not have the wherewithal to pay taxes on that revenue, it may not be taxable.

This concept considers the taxpayer's overall financial situation, including their income, assets, and liabilities, to determine whether they have the ability to pay the tax liability.

In some cases, the wherewithal-to-pay concept may override the financial accounting treatment of a particular item. For example, a company may have recorded a revenue item in its financial statements, but if they do not have the wherewithal to pay taxes on that revenue, it may not be taxable.

Similarly, a company may have recorded a loss in its financial statements, but if they have the wherewithal to pay taxes, it may still have a tax liability on that loss.

Overall, the wherewithal-to-pay concept is an important consideration in tax law as it ensures that taxpayers are not taxed beyond their ability to pay. It allows for a more fair and equitable tax system by taking into account the taxpayer's overall financial situation rather than just their accounting treatment of a particular item.

Read more about Wherewithal-to-pay at https://brainly.com/question/16875493

#SPJ11

the poole company reported the following income for year 2: sales $30,500 cost of goods sold 8,100 gross margin $22,400 selling and administrative expense 10,100 operating income $12,300 interest expense 4,100 income before taxes $8,200 income tax expense 2,460 net income $5,740 what is the company's net margin? (round your answer to 2 decimal places.) multiple choice 73.44% 40.33% 26.89% 18.82%

Answers

The Poole Company's net margin is approximately 18.82%.

How to calculate the net margin

The Poole Company's net margin can be calculated using the following formula:

Net Margin = (Net Income / Sales) x 100

Given the financial information provided, we know that the company's net income is $5,740 and sales are $30,500.

Plugging these values into the formula, we get:

Net Margin = ($5,740 / $30,500) x 100

Net Margin = 0.18819672131148 x 100

Net Margin ≈ 18.82%

Learn more about net margin at

https://brainly.com/question/29996163

#SPJ11

With a checking account, you won't be charged the 10% fee when you deposit a check. How much will you save on your weekly pay of $341.52.
⭐️$34.15
⭐️$1,110.64
⭐️$341.52
⭐️$1,793.68

Answers

The correct answer is ⭐️$34.15. If you were being charged a 10% fee on your weekly pay of $341.52, you would be losing $34.15 every week.

However, with a checking account, you wouldn't have to pay that fee, so you would save $34.15 each week. With a checking account, you won't be charged the 10% fee when you deposit a check. If your weekly pay is $341.52, a 10% fee would be $34.15. Therefore, by using a checking account, you will save $34.15 on your weekly pay. Your answer is:

⭐️$34.15

Learn more about deposit here:

https://brainly.com/question/29454677

#SPJ11

With a checking account, you won't be charged the 10% fee when you deposit a check. You will save $34.15 on your weekly pay $341.52, option a.

With a checking account, you won't be charged the 10% fee when you deposit a check. Now calculating how much you will save on your weekly pay of $341.52:

Firstly, determining the 10% fee:

$341.52 × 0.10 = $34.15

Since you won't be charged this fee with a checking account, the amount you save is $34.15.

Your answer: ⭐️$34.15

To learn more about checking account: https://brainly.com/question/24751568

#SPJ11

The pure rate of interest is 2.5% and the inflation premium is 5%. if you are required a risk premium of 3.4%, what is the real rate? Use the exact formula.
The pure rate of interest is 2.5 percent and the inflation premium is 5 percent. If you require a risk premium of 3.5 percent, what is the real rate? Use exact formulation 11.00% 8.75% 6.00% 11.39% 6.09%

Answers

The real rate is 5.61%. To find the real rate when given the pure rate of interest (2.5%), inflation premium (5%), and risk premium (3.4%), you need to use the Fisher equation:Real Rate = (1 + Nominal Rate) / (1 + Inflation Rate) - 1

First, you need to find the Nominal Rate by adding the pure rate of interest, inflation premium, and risk premium:
Nominal Rate = Pure Rate of Interest + Inflation Premium + Risk Premium ,Nominal Rate = 2.5% + 5% + 3.4% = 10.9%

Now, you can use the Fisher equation to find the Real Rate: Real Rate = (1 + 10.9%) / (1 + 5%) - 1 Real Rate = 1.109 / 1.05 - 1Real Rate = 0.0561 or 5.61% So, the real rate is 5.61%.

To know more about real rate ,refer to the link:

https://brainly.com/question/29704316#

#SPJ11

Why do you think it is difficult for high-income countries to
achieve high growth rates?

Answers

Achieving high growth rates in high-income countries can be challenging due to diminishing returns on investment, an aging population, and structural challenges. They may also face structural challenges such as a lack of competition, bureaucracy, and corruption.

One of the primary reasons that high-income countries struggle to achieve high growth rates is due to diminishing returns on investment. As countries become more developed, the returns on investment tend to decrease as the economy becomes more efficient and the low-hanging fruits of development are already picked.

Additionally, an aging population can lead to increased government spending on pensions, healthcare, and other social welfare programs, which can limit the resources available for investment and development.

In some cases, high-income countries may also face structural challenges such as a lack of competition, bureaucracy, and corruption. These factors can limit the potential for growth and innovation by reducing incentives for investment and entrepreneurship.

Know more about bureaucracy here:

https://brainly.com/question/30696747

#SPJ11

as a marketer specializing in search engine optimization, you ensure that a website is well-organized and that it is easily crawled by search engines. this represents which seo task?

Answers

The task that is being described is commonly known as on-page optimization.

As a marketer specializing in search engine optimization, it is your responsibility to make sure that a website's pages are structured and organized in a way that makes it easy for search engines to understand the content and context.

This includes optimizing the website's title tags, meta descriptions, headers, content, and internal links.

The goal of on-page optimization is to ensure that search engines can quickly and easily crawl and index a website, making it more likely to rank higher in search engine results pages (SERPs).

Additionally, on-page optimization can improve the user experience by making it easier for visitors to navigate and find the content they are looking for on a website.

To know more about on-page optimization refer here: https://brainly.com/question/29229544#

#SPJ11

a wealthy client has a trip planned where they intended to do business in china for a few weeks and then follow the

Answers

a wealthy client has a trip planned where they intended to do business in China for a few weeks and then follow the Hedge the currency risk by buying Chinese yuan forward.

The client may need to exchange a sizeable sum of US dollars into Chinese yuan if they plan to conduct business in China for a few weeks before returning home for a holiday. Due to the possibility of considerable exchange rate fluctuations over a brief period of time, this conversion puts them at risk for currency loss. The client should think about purchasing Chinese yuan forward, which is agreeing to buy a specific quantity of yuan at a specific exchange rate on a future date, as a way to protect themselves against this danger. By doing this, the client can secure a favorable exchange rate and guard against unfavorable changes in that rate. They could carry on their business and take their holiday without worrying about currency swings thanks to this. The client should carefully weigh the costs and hazards involved before electing to use forward contracts to hedge their currency risk, as they may be pricey and sometimes call for collateral or other kinds of security.

learn more about Chinese yuan forward here:

https://brainly.com/question/16856680

#SPJ11

As a wealthy client, it's important to carefully plan your trip to China in order to make the most of your time there. Doing business in China can be a complex and nuanced process, and it's important to have a clear understanding of the local business culture and customs in order to succeed.

Before you leave for your trip, it's a good idea to do some research and gather information about your potential business partners in China. This can help you establish a rapport and build trust with them, which is critical for successful business relationships in China.

Once you arrive in China, you'll want to spend some time networking and attending business events in order to meet potential partners and clients. It's also a good idea to schedule some meetings with local companies and government officials to discuss potential business opportunities.

After your business is concluded, you can follow the itinerary of your trip to explore the cultural and historical highlights of China, such as visiting the Great Wall, exploring ancient temples, or trying local delicacies. With careful planning and preparation, your trip to China can be both productive and enjoyable.

Learn more about business here:

https://brainly.com/question/8119526

#SPJ4

Find the present value of an annuity which pays $100 at the beginning of each year for 10 years if the rate of interest is 4% compounded semiannually. A) $956.60 B) $1056.60 C) $1156.60 D) $1256.60 E) $1356.60

Answers

The present value of an annuity is the current value of a series of equal payments received or paid out over a specified period of time. In this case, the annuity pays out $100 at the beginning of each year for a total of 10 years. The rate of interest is 4% compounded semiannually.

To calculate the present value of the annuity, we can use the formula:

PV = PMT x [(1 - (1 + r/n)^(-nt)) / (r/n)]

Where PV is the present value, PMT is the payment amount, r is the annual interest rate, n is the number of compounding periods per year, and t is the total number of years.

Substituting the given values, we get:

PV = $100 x [(1 - (1 + 0.04/2)^(-2x10)) / (0.04/2)]


PV = $100 x [(1 - (1.02)^(-20)) / (0.02)]


PV = $100 x [9.4269]


PV = $942.69

Therefore, the present value of the annuity is $942.69. However, the given answer options are all slightly different from this value. Upon checking the calculations, it appears that the correct answer is actually A) $956.60, which is the closest to our calculated value of $942.69. It is possible that there was a rounding error or an error in the answer options provided.

To know more about annuity refer here

https://brainly.com/question/23554766#

#SPJ11

You have $10,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 12.4 percent and Stock Y with an expected return of 10.1 percent. If your goal is to create a portfolio with an expected return of 10.85 percent, how much money will you invest in Stock X? In Stock Y?
Please Provide answer in excel with formula

Answers

We should invest $4,910 in Stock X and $5,090 in Stock Y to achieve the desired portfolio return of 10.85%.

Calculate the amount of money to be invested in each stock?

To calculate the amount of money to be invested in each stock, we need to use the formula for the expected return of a portfolio:

Expected return = Weight of Stock X * Expected return of Stock X + Weight of Stock Y * Expected return of Stock Y

And we also know that the weights of the two stocks must add up to 1.

Let's assign the weight of Stock X as "w" and the weight of Stock Y as "1-w". Then we can set up two equations to solve for "w" and "1-w".

Expected return = 0.124w + 0.101(1-w) = 0.1085

w + (1-w) = 1

Solving these equations simultaneously, we get:

w = (Expected return of portfolio - Expected return of Stock Y) / (Expected return of Stock X - Expected return of Stock Y)

w = (0.1085 - 0.101) / (0.124 - 0.101) = 0.491

So we should invest 49.1% of the $10,000 in Stock X, and the remaining 50.9% in Stock Y.

The amounts can be calculated using the following formulas in Excel:

Amount in Stock X = $10,000 * 0.491 = $4,910

Amount in Stock Y = $10,000 * (1 - 0.491) = $5,090

Therefore, we should invest $4,910 in Stock X and $5,090 in Stock Y to achieve the desired portfolio return of 10.85%.

Learn more about stocks

brainly.com/question/31476517

#SPJ11

Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either $70,000 or $190,000, with equal probabilities of 0.5. The alternative riskless investment in T-bills pays 5%.
a. If you require a risk premium of 7%, how much will you be willing to pay for the portfolio? (Round your answer to the nearest dollar amount.)
Value of the portfolio= ? $
b. Suppose the portfolio can be purchased for the amount you found in (a). What will the expected rate of return on the portfolio be? (Do not round intermediate calculations. Round your answer to the nearest whole percent.)
Rate of return= ? %

Answers

a. The value of portfolio=$116,071

b. The expected rate of return on the portfolio =  12%.

Explanation:

a. To find the value of the portfolio, we need to calculate the expected return and then adjust for the required risk premium.

1. Calculate the expected cash flow:
Expected cash flow = (0.5 * $70,000) + (0.5 * $190,000) = $35,000 + $95,000 = $130,000

2. Calculate the required return:
Risk-free rate = 5%
Risk premium = 7%
Required return = Risk-free rate + Risk premium = 5% + 7% = 12%

3. Calculate the value of the portfolio:
Value of the portfolio = Expected cash flow / (1 + Required return) = $130,000 / (1 + 0.12) = $130,000 / 1.12 ≈ $116,071

So, the value of the portfolio is $116,071.

b. To find the expected rate of return on the portfolio, we need to calculate the expected cash flow from the portfolio and divide it by the portfolio's value.

1. Calculate the expected cash flow from the portfolio:
Expected cash flow = $130,000 (as calculated in part a)

2. Calculate the expected rate of return:
Expected rate of return = (Expected cash flow / Value of the portfolio) - 1 = ($130,000 / $116,071) - 1 ≈ 0.12

So, the expected rate of return on the portfolio is 12%.

To know more about Rate of return, click:

ttps://brainly.in/question/33443991?u

#SPJ11

technology is defined as question content area bottom part 1 a. the process of recycling products. b. the process of developing and revising models. c. new innovations and creations. d. the processes used to produce goods and services.

Answers

Technology is defined as "new innovations and creations"  The correct answer is (c).

Technology refers to the application of scientific knowledge for practical purposes and the development of new tools, equipment, and systems to solve problems or improve existing processes. It involves the creation and use of new ideas, techniques, and equipment to improve productivity, efficiency, and quality of products and services. While recycling, modeling, and production processes may involve the use of technology, they are not the primary definition of technology itself.

The correct answer is (c) new innovations and creations.

You can learn more about Technology at

https://brainly.com/question/25110079

#SPJ11

a stock with a current price of $32 will either move up to $40.00 or down to $30 over the next period. the risk-free rate of interest is 2.3%. what is the value of a call option with a strike price of $33?

Answers

The value of a call option with a strike price of $33 is $4.29.

To calculate the value of a call option with a strike price of $33 on a stock that has a current price of $32 and can either move up to $40 or down to $30, we can use the Binomial Option Pricing Model. Given the risk-free rate of interest at 2.3%, here's how to proceed:

1. Calculate the up and down factors (u and d):

u = $40 / $32 = 1.25
d = $30 / $32 = 0.9375

2. Calculate the probability of an upward movement (p) using the risk-free rate (r):

p = (1 + 0.023 - 0.9375) / (1.25 - 0.9375) = 0.612903

3. Calculate the probability of a downward movement (1 - p):

1 - p = 1 - 0.612903 = 0.387097

4. Find the call option value in each final node (max(0, stock price - strike price)):

Up node: max(0, $40 - $33) = $7
Down node: max(0, $30 - $33) = $0

5. Discount the expected option values back to the present using the risk-free rate:

Value of call option = [(p * up node) + ((1 - p) * down node)] / (1 + risk-free rate)

Value of call option = [(0.612903 * $7) + (0.387097 * $0)] / (1 + 0.023)

Value of call option = $4.29022

The value of the call option with a strike price of $33 is approximately $4.29.

Know more about Binomial Option Pricing Model here:

https://brainly.com/question/31376392

#SPJ11

A ________ is a list of questions that encourage the writer to think about audience, purpose, key issues, and delivery.
A) general guide
B) writing startup sheet
C) rough draft
D) outline

Answers

A writing startup sheet is a list of questions that encourage the writer to think about audience, purpose, key issues, and delivery. So, the correct answer is B) writing startup sheet.

A writing startup sheet is a document that provides a list of questions to help a writer plan and organize their writing project. This sheet includes questions that encourage the writer to think about their target audience, purpose of the writing, key issues to address, and how to deliver their message effectively.

By answering these questions, the writer can gain a clear understanding of what they need to accomplish with their writing and how to go about it. The writing startup sheet serves as a useful tool to ensure that the writer stays focused and on track throughout the writing process.

It can also help prevent writer's block and improve the quality of the final product by ensuring that all important elements are included.

To know more about writing refer here:

https://brainly.com/question/3379408#

#SPJ11

Calculate the amount of monthly payments on a $25,000 loan payable over 5 years at 12% annual interest, computed monthly.

Answers

The amount of monthly payments on a $25,000 loan payable over 5 years at 12% annual interest, computed monthly, is $555.06.

To calculate the monthly payments on the loan, we first need to convert the annual interest rate to a monthly rate by dividing it by 12. So the monthly interest rate is 1% (12% divided by 12). We can then use the formula for calculating the monthly payment on a loan, which is:

M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]

where M is the monthly payment, P is the loan amount, i is the monthly interest rate, and n is the number of months over which the loan is repaid. Plugging in the given values, we get:

M = $25,000 [ 0.01(1 + 0.01)^60 ] / [ (1 + 0.01)^60 - 1 ] = $555.06

Therefore, the amount of monthly payments on the loan is $555.06.

For more questions like Rate click the link below:

https://brainly.com/question/14731228

#SPJ11

stock x has a beta of 0.5 and stock y has a beta of 1.5. which of the following statements must be true about these securities? (assume market equilibrium.) group of answer choices stock y's realized return next year will be higher than stock x's return. stock y has a higher standard deviation than stock x. if the expected rate of inflation increases but the market risk premium is unchanged, the required return on stock y will increase by more than that on stock x. if the market risk premium declines, stock x will have a larger decline in its required return than stock y. if you invest $50,000 in each of stocks x and y, your 2-stock portfolio will have a required return that is equal to the market return.

Answers

The correct statement among the options provided is: "If the expected rate of inflation increases but the market risk premium is unchanged, the required return on stock y will increase by more than that on stock x."

This is because stock y has a higher beta than stock x, indicating that it is more sensitive to changes in the market.

Therefore, if the expected rate of inflation increases, the required return on stock y will increase by a larger amount compared to stock x.

The other statements are not necessarily true and depend on various factors such as market conditions, individual stock performance, and portfolio diversification.

To know more about inflation here

https://brainly.com/question/30112292

#SPJ11

Explain how a "rising" American dollar will affect (a) an American company which imports cashews; and (b) an American company which exports apples.

Answers

A rising American dollar will negatively impact an American company which imports cashews because it will increase the cost of the cashews, making them more expensive to purchase.

This is because the value of the dollar increases relative to other currencies, making foreign goods more expensive to buy.

On the other hand, a rising American dollar will positively impact an American company which exports apples because it will make their apples cheaper for foreign buyers to purchase. This is because the value of the dollar increases relative to other currencies, making American goods cheaper for foreign buyers.

In summary, a rising American dollar will have a different effect on American companies depending on whether they import or export goods. Importing companies will face increased costs, while exporting companies will benefit from cheaper prices for their goods.

To know more about American dollar  click on below link:

https://brainly.com/question/29980124#

#SPJ11

the table shows costs for an individual firm. which of the following statements is true? marginal cost is greater than average total cost for quantities greater than 4. average total cost is increasing for quantities greater than 4. the minimum of average total cost is at a quantity of 6.

Answers

The table cost of every cost of an individual firm shows the marginal cost is greater than the average total cost when it has greater quantities.

The marginal cost usually will be less than the total average cost in small quantities but in greater or larger quantities the marginal cost is greater then the total cost of quantities. The  marginal cost is the cost that is incurred when the average cost is down. So the relationship between the average total cost and the the minimum cost will always be equal when the average total cost increases.

The logic that is used between the minimum cost and the average total cost is that the average must increase for the minimum curve at a point on the Average cost. The graph of the curve shows that the marginal cost falls down when the average cost fall down or decreases, so it can be said as directly proportioned. Whereas if average cost increases then the minimum value will also be pulled up.

The minimum cost is always equal to the marginal cost or the average total cost so the point of curve will always be in the center. So the relationship can be showed as minimum cost = average total cost. The average total cost can be said as the total of the expenses or the cost incurred with the products that are produced in units. This will also include the fixed operations and variable operations or cost.

So the cost of product includes the production cost which will improve the total output that is multiplied with the marginal cost. But the average total cost is the mixture or the combination, that will be taken with the total number of outputs and units that is produced in the firm. Whereas the production cost is the additional of the production these leads to minimize the profits in the firm.

Read more about marginal cost on:

brainly.com/question/13950634

#SPJ4

after a company recognizes a need, it develops product ______ that potential suppliers can use to develop their proposals to supply the product.

Answers

After a company recognizes a need, it develops product specifications that potential suppliers can use to develop their proposals to supply the product.

A product spec is a blueprint that describes the product you will be creating, including the features it will have and the requirements it must meet. It could also mention the user or identity for whom it is being created.

This specification must contain all the details your design team and product team members require and be very clear and simple to understand. Provide as much detail as you can so that your product team's understanding of the specs is not hindered.

To know more about product specifications, refer:

https://brainly.com/question/20038773

#SPJ4

After a company recognizes a need, it develops product specifications that potential suppliers can use to develop their proposals to supply the product. A product spec is a blueprint that describes the produc.

you will be creating, including the features it will have and the requirements it must meet. It could also mention the user or identity for whom it is being created. This specification must contain all the details your design team and product team members require and be very clear and simple to understand. Provide as much detail as you can so that your product team's understanding of the specs is not hindered.

learn more about product here:

brainly.com/question/20038773

#SPJ11

Other Questions
Over the past month, the Westminster library has loaned out many CDs, which are categorized by genre. Latin 86 rock 16 hip-hop 45 reggae 126 What is the experimental probability that the next CD loaned out will be a reggae CD? your audience analysis reveals that audience members will be friendly and interested in your topic. you should be The cost, in dollars, of a single-story home can be approximated using the formulaC = klw, where is the approximate length of the home and w is the approximatewidth of the home. Find the units for the coefficient k. Which of the following transactions is represented by the diagram below? a. Vendors send a bill for each inventory item purchased which is payable b. A single purchase of inventory is paid for with multiple payments.c. Inventory vendors send a monthly bill for merchandise delivered. The seller does not accept or allow installment payments.d. Some inventory purchases are paid for with multiple payments and some payments may apply to multiple purchases. Compare and contrast objective and nonobjective images. What is one thing that makes them different from each other? A. An objective image is a study in lines, colors, or other elements; a nonobjective image is based on a real object or scene. B. An objective image is a type of abstract art; a nonobjective image is not a type of abstract art. C. An objective image contains a familiar object that is easy to recognize; a nonobjective image contains a familiar object that has been distorted. D. An objective image contains a familiar object that has been distorted; a nonobjective image is not based on real objects rob was gathering his tools, taking his supplements and feeding his dogs and reflectively answered yes to his roommate asking him to put garbage out. rob walks out without putting out the garbage. this is an example of . group of answer choices dichotic-listening feature search conjunction search selective attention Holly is taking the PIRLS, which is the main international test of _____.a) creative problem solvingb) IQc) science and mathd) reading A savvy investor paid $6000 for a 20-year $10,000 mortgage bond that had a bond interest rate of 8% per year, payable quarterly. Three years after he purchased the bond, market interest rates went down, so the bond increased in value. If the inves- tor sold the bond for $11,500 three years after he bought it, what rate of return did the investor make (a) per quarter, and (b) per year (nominal) match the answers to the questions. due tmr! EFGH is a kite. Find angle G. Income generated from the Toyota factory in Kentucky is counted as A. GNP in the U.S. and GDP in Japan B. GNP in the U.S. and Japan C. GDP in the U.S. and Japan D. GDP in the U.S. and GNP in Japan T if you declare a pointer to the object of the parent class and use the pointer to access the object of a child class, you can access the component of an hrm system that gives managers the information they need to make decisions about how to train, motivate, and reward organizational members is known as The Board of Directors of a Canadian firm must: : a. Act in the best interests of the board of directors of the firm.b. Act the best interests of the managers of the firm. c. Act in the best interests of the company. d. Always act in the best interests of the shareholders.e. Always act in the best interests of all stakeholders including creditors. ???????????? Someone help me with this answer please an individual who exercises for a short time to lose weight for a class reunion and then quits following the event would be considered to have what type of motivation? you have a portfolio which is comprised of 60% of stock a and 40% of stock b. what is the expected rate of return on this portfolio? state prob a b boom .20 15 % 9 % normal .80 8 % 20 % multiple choice 12.76% 12.88% 13.44% 13.56% 13.85% What is true of spontaneous reactions?O They are indicated by a negative change in Gibbs free energy.O They have a positive value of AS.O They are instantaneous.O They always release heat.Help 20pts what technical elements are necessary to create a photograph?what technical elements are necessary to create a photograph?light-sensitive material, a negative, and a lensa daguerreotype, multiple prints, and a lensa light-tight box with a small opening, and a light-sensitive materiala camera obscura, photogenic drawing, and light tight box The salary used in the benefit formula for a defined-benefit (DB) plan could be your a.highest salary b.All of the choices are correct. c.average of the salary in three to five of your highest-salary years.d.final salary