Answer:
Expected return = 21.9
%
Explanation:
<em>The capital asset pricing model is a risk-based model. Here, the return on equity is dependent on the level of reaction of the the equity to changes in the return on a market portfolio. These changes are captured as systematic risk. The magnitude by which a stock is affected by systematic risk is measured by beta</em>.
Under CAPM, Ke= Rf + β(Rm-Rf)
Rf-risk-free rate (long-term i.e 10 year treasury bill rate), β= Beta, Rm= Return on market., Ke- Return on equity (cost of equity)
This model can be used to work out the cost of equity as follows:
Ke= Rf + β (Rm-Rf)
Rf- 5%, β= 1.3, Rm- 18, E(r)- ?
Ke = 5% + 1.3×(18-5)%=21.9
%
Ke = 21.9
%
Expected return = 21.9
%
Answer:
B) WACC 12.00000%
Explanation:
Ke 0.15 (we are asked for the WACC if retained earnings are used, so we ould assing RE rate
Equity weight 0.55
Kp 0.11
Preferred Weight 0.2
Kd(1-t) (after-tax debt) 0.07
Debt Weight 0.3
WACC 12.00000%
11th edition miroconitionals plus new my econlab
<u><em>Securities and Exchange Commission is the answer that you are looking for</em></u>
<em><u />Hope this helps :)</em>
Answer:
b. manufacturing overhead costs.
Explanation:
Manufacturing overhead cost refers to all costs associated with production apart from direct labor or direct materials. They are the indirect costs incurred during the manufacturing process. Manufacturing overhead costs are the production costs that can not be traced directly to the produced items.
Examples of manufacturing overhead costs include depreciation, repairs and maintenance, insurance, and heating costs. Some aspects of the costs, such as depreciation, insurance, rents for the manufacturing space, are fixed costs. They do not vary with production. Other elements of manufacturing costs, such as power, repairs, and utilities, are variable costs.
