Determine the required rate of return for Johnson and Johnson, assuming the geometric growth rate was 13.04% for the period 2001-2010, its trading price on January 14, 2011 was $62.55, and the dividend for 2010 was $2.110.

The required rate of return for Johnson and Johnson is 16.85%

Explanation:

Johnson and Johnson paid an annual dividend of $2.110 last year, the geometric growth rate was 13.04 percent during last ten years.

To find out the expected dividend to be paid be Johnson and Johnson this year.

= [$2.110(1.1304)]

= $2.385

Required Rate of Return is calculated by the following formula,

R =

R = 2.385/62.55 + 0.1304

R = .1685, or 16.85%

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation:

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.