The common stock of big marvin treats has a total return of 10.25 percent, a stock price of $28.75, and recently paid an annual dividend of $1.65. what is the capital gains rate if the company maintains a constant dividend?

4.52%

Explanation:

Annual dividend = $1.65

Stock price = $28.75

Total return on common stock = 10.25 percent

Therefore,

Required return of dividend:

= Annual dividend ÷  Stock price

= $1.65  ÷ $28.75

= 0.0573

= 5.73%

Capital gain rate:

= Total return - Required return of dividend

= 10.25% - 5.73%

= 4.52%

Hence, the capital gains rate is 4.52% if the company maintains a constant dividend.

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.