number 2 help please. 12) The stocks for BMT & AWM have the following probabilit

Question

   number 2 help please.

12) The stocks for BMT & AWM have the following probability distributions Recession Average Boom Probabilit 50% 30% 20% 8% 14% 20% AWM 14% 17% 22% a) Compute the expected rate of return for BMT b) Compute the expected rate of return for AWM 13 Answer problem 9-16 (NOT part b) on pages 179 & 180 of the textbook 14) Last year BMT Corporation earned $20 million, and paid $8 million in d company follows a constant payout ratio dividend policy. If the company w million in dividends next year, how much must BMT earn? 5) AWM sells 291,600 units of product annually. The optimal safety stock inits costs AVVM $3, carrying costs are 30%, and the cost of placing an ord 20 a) Compute the EOQ. b) Compute the total inventory costs at the EOQ level

Explanation / Answer

a. Expected rate of return for BMT = 12.20%

b. Expected rate of return for AWM = 16.50%

All other question except question 12, has missing numbers as the image is not completly covering the required figures. Hence, only question 12 is being answered. Thanks

Economy Probability BMT AWM Return (BMT = Prob. * BMT) Return (AWM = Prob. * AWM) Recession 0.50 0.08 0.14 0.04 0.07 Average 0.30 0.14 0.17 0.042 0.051 Boom 0.20 0.20 0.22 0.04 0.044 0.122 0.165 Expected Return 12.20% 16.50%

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