Question

You decide to form a portfolio with the following amounts invested in the following stocks. What is the expected return of th
Your firm recently paid a dividend of $4 to common stockholders. Dividends are expected to grow at 8% per year for the forese
Last year, Cayman Corporation had sales of $7,000,000, total variable costs of $3,000,000, and total fixed costs of $1,500,00
Last year, Cayman Corporation had sales of $30,000,000, total variable costs of $13,500,000, and total fixed costs of $5,000,
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Answer #1

Hi

As per policy we will solve only first question here.

1) Total amount invested = 7800+ 1200 +3000 + 3000

=$15,000

Total expected return = 13.5*7800/15000 + 14.5*1200/15000 + 15.8*3000/15000 + 18.1*3000/15000

=7.02 + 1.16 + 3.16 + 3.62

=14.96%

Hence second option 0.1496 is correct here.

Thanks

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