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avni Istiqso bexit leitini ne eiuper foon en jong sey-2 wen s pritsulave ai ynвqmo xehov a) Using the CAPM, calculate the required rate of return on equity. Dus eldsiosqebпой) 000,0223 uloni) atezas Istiqso bexit lls ensey 2 to brie erf 1A .bonsq 169y-88 19vo 019s of aiasd enil-tripiste liw bns aleaas inemuo ni 000,003 eiuper oals lliw losjonq eriT .000,0813 101 bloa ed of betbeqxe 916 raso eiuper bns 000,0083 to zelse Isunns etstenep of betoeqxe ai tl .asitilidsil Insmuo ni 000,093 lenipnem s bris Otel toejonq erit no muter to ets1 beniupen erT 16ey rose 000,0019 to asaneqxe b) Given that the stock will sell for €15.40 at the end of the year and that it will make only one dividend payment over the holding period (at the end of the year), calculate the value of the company's stock. veltuo inamtasvni Isitini erit etsluols (6

avni Istiqso bexit leitini ne eiuper foon en jong sey-2 wen s pritsulave ai ynвqmo xehov a) Using the CAPM, calculate the required rate of return on equity. Dus eldsiosqebпой) 000,0223 uloni) atezas Istiqso bexit lls ensey 2 to brie erf 1A .bonsq 169y-88 19vo 019s of aiasd enil-tripiste liw bns aleaas inemuo ni 000,003 eiuper oals lliw losjonq eriT .000,0813 101 bloa ed of betbeqxe 916 raso eiuper bns 000,0083 to zelse Isunns etstenep of betoeqxe ai tl .asitilidsil Insmuo ni 000,093 lenipnem s bris Otel toejonq erit no muter to ets1 beniupen erT 16ey rose 000,0019 to asaneqxe b) Given that the stock will sell for €15.40 at the end of the year and that it will make only one dividend payment over the holding period (at the end of the year), calculate the value of the company's stock. veltuo inamtasvni Isitini erit etsluols (6

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Task 2: Assume the following information about a company: Current dividend per share (Do) of common stock. Expected growth rate for the year (g) Risk-free rate of return Expected return on the market Beta of the company's common stock InsmegensM Isionsni :MAX3 JAWA €4.00 20% 6% 11% 1.2 comen comemua quor t last xehov ey-2 wen s pritsulave ai vrsqmo a) Using the CAPM, calculate the required rate of return on equity eldsi non otnemtaevni Istiqso bexit Isitini no betsipedeb onal paibuloni) atsaas Istiqso bexit Ils ensey 2 to brie erf 1A .boheq sey-2 s 19vo 019s of aiasd enil-tripiste tsenep lliw bns ateses tremuo ni 000,003 eiupe1 oals lliw 109j01q erT .000,0213 10t bloa ed of betoexe 916 onitsiaqo raso esiupе1 brв 000,0083 to selsa Isunns etsienep of betoeqxe ai tl .aeitilidsil temuo ni 000,093 ei ets1 xst lenigism s bns Otai toejorq erit no muter to ets1 beniupе1 erT 16ey rose 000,0019 to asaneqxe b) Given that the stock will sell for €15.40 at the end of the year and that it will make only one dividend payment over the holding period (at the end of the year), calculate the value of the company's stock. veltuo tremtaevni Isitini erit etsluols (s 2-18169Y 1ot ewolt raso gnitsieqo xst-1etts erit etsluols (d Task 3: The firm is reviewing its capital budget for the upcoming year. The company's target capital structure is 60% equity and 40% debt, it has 1 million shares of common equity outstanding, and its net profit is €8 million. The company forecasts it would require €10 million to fund all of its profitable (i.e., positive-NPV) projects for the upcoming year. b) What is the main disadvantage of the residual dividend policy? a) If the company follows the residual model with all distributions in the form of dividends, what will be the company's dividend per share and payout ratio for the upcoming year? wolt reso pritisqo-non 189y Isnimmet ert etsluols ( betes ed sjong er bluori2 bjon erit to VM erit etsluols (b Task 4: The firm sells a product at a price of €4.00 per unit. The product's variable cost per unit is €2.50. The product has fixed cost of €12,000. What is the company's breakeven point, in units? coods
Transcribed Image Text:Task 2: Assume the following information about a company: Current dividend per share (Do) of common stock. Expected growth rate for the year (g) Risk-free rate of return Expected return on the market Beta of the company's common stock InsmegensM Isionsni :MAX3 JAWA €4.00 20% 6% 11% 1.2 comen comemua quor t last xehov ey-2 wen s pritsulave ai vrsqmo a) Using the CAPM, calculate the required rate of return on equity eldsi non otnemtaevni Istiqso bexit Isitini no betsipedeb onal paibuloni) atsaas Istiqso bexit Ils ensey 2 to brie erf 1A .boheq sey-2 s 19vo 019s of aiasd enil-tripiste tsenep lliw bns ateses tremuo ni 000,003 eiupe1 oals lliw 109j01q erT .000,0213 10t bloa ed of betoexe 916 onitsiaqo raso esiupе1 brв 000,0083 to selsa Isunns etsienep of betoeqxe ai tl .aeitilidsil temuo ni 000,093 ei ets1 xst lenigism s bns Otai toejorq erit no muter to ets1 beniupе1 erT 16ey rose 000,0019 to asaneqxe b) Given that the stock will sell for €15.40 at the end of the year and that it will make only one dividend payment over the holding period (at the end of the year), calculate the value of the company's stock. veltuo tremtaevni Isitini erit etsluols (s 2-18169Y 1ot ewolt raso gnitsieqo xst-1etts erit etsluols (d Task 3: The firm is reviewing its capital budget for the upcoming year. The company's target capital structure is 60% equity and 40% debt, it has 1 million shares of common equity outstanding, and its net profit is €8 million. The company forecasts it would require €10 million to fund all of its profitable (i.e., positive-NPV) projects for the upcoming year. b) What is the main disadvantage of the residual dividend policy? a) If the company follows the residual model with all distributions in the form of dividends, what will be the company's dividend per share and payout ratio for the upcoming year? wolt reso pritisqo-non 189y Isnimmet ert etsluols ( betes ed sjong er bluori2 bjon erit to VM erit etsluols (b Task 4: The firm sells a product at a price of €4.00 per unit. The product's variable cost per unit is €2.50. The product has fixed cost of €12,000. What is the company's breakeven point, in units? coods
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