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Kaylis [27]
1 year ago
5

American Paper Company has a beta of 1.2. The risk-free rate is 6 percent and the required return on the market is 14 percent. T

he required rate of return on the security is
Business
1 answer:
Lynna [10]1 year ago
3 0

American Paper Company has a beta of 1.2. The risk-free rate is 6 percent and the required return on the market is 14 percent. The required rate of return on the security is:

  • -15.6%
  • -13.2%
  • -22.0%
  • -22.8%

<h3>What Is the Security Market Line?</h3>

The security market line (SML) is a line drawn on a chart that serves as a graphical representation of the capital asset pricing model (CAPM)—which shows different levels of systematic, or market risk, of various marketable securities, plotted against the expected return of the entire market at any given time.

Its Also known as the "characteristic line," the SML is a visualization of the CAPM, where the x-axis of the chart represents risk (in terms of beta), and the y-axis of the chart represents expected return. The market risk premium of a given security is determined by where it is plotted on the chart relative to the SML

The formula for plotting the SML is:

Required return = risk-free rate of return + beta (market return - risk-free rate of return)

Learn more about SML on:

brainly.com/question/15877803

#SPJ4

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Ilia_Sergeevich [38]

Answer:

1. <em>If this law of contributory negligence applies to the state, then Ramona will receive no compensation for the damages she sustained. </em>

<em> </em>2<em>. If this law of comparative negligence applies to this state, then Ramona will get 100% - 20% = 80% of the damages incurred in the accident, from John which will be $80,000</em>

<em />

Explanation:

In contributory negligence, the defense completely bars plaintiffs from any recovery if they contribute to their own injury through their own negligence.

<em>If this law of contributory negligence applies to the state, then Ramona will receive no compensation for the damages she sustained. </em>

<em> </em>

In comparative negligence, the plaintiff's damages is award by the percentage of fault that the fact-finder assigns to the plaintiff for his or her own injury i.e the plaintiff's damage compensation is reduced by percentage of his/her percentage of fault.

<em>If this law of comparative negligence applies to this state, then Ramona will get 100% - 20% = 80% of the damages incurred in the accident, from John</em>

this is 80% of $100,00 which is equal to <em>$80,000</em>

8 0
3 years ago
Someone who likes building, designing, or creating things probably has a(n)
Afina-wow [57]
It is an architect because they love to build things and create things as well  <span />
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The following accounts were abstracted from Oriole Company's unadjusted trial balance at December 31, 2020: Debit Credit Account
Ronch [10]

Answer:

$52,710

Explanation:

Calculation for allowance for uncollectible accounts credit balance

Using this formula

Allowance for uncollectible accounts credit balance=Estimated gross uncollectible accounts receivable *Accounts receivable

Let plug in the formula

Allowance for uncollectible accounts credit balance=7%* $753,000

Allowance for uncollectible accounts credit balance=$52,710

Therefore After adjustment at December 31, 2020, the allowance for uncollectible accounts should have a credit balance of $52,710

7 0
3 years ago
What is the real advantage to a franchise? They already have all of their signs and menus prepared. When a company is able to of
11111nata11111 [884]

Answer:  When a company is able to offer a good product and enjoy strong customer demand, a franchise owner not only is able to take advantage of the corporate identity but its strong customer base, as well.

A franchise is a kind of a license which allows the party who acquires it (franchisor) access to an business' (franchisor's) proprietary knowledge and processes  in order to sell products or provide services under the franchisor's name.

A franchisee associates itself with a well proven business model and gains access to the franchisor's customer base. Additionally, the franchisor provides  assistance by training the franchisee and his personnel to provide a uniform product or service experience to customers across all the stores.

All these factors help in eliminating business risk and this constitutes a real advantage to a franchise.

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3 years ago
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A government deficit has increased from 30 to 50. The country's trade deficit is 100 and private savings equal 65 and investment
viva [34]

Answer:

If Ricardian neutrality holds true, after this change in the government's budget, private savings will equal 40.

Explanation:

S - I = X - M, where

S = Sp + Sg, where

Sp: private saving

Sg: Public saving = T - G

Sp + T - G - I = X - M

or,

Sp - I = (G - T) - (M - X) = Budget deficit - Trade deficit

Initially,

65 - 30 = 90 - 100 = - 10

When budget deficit falls to 50,

Sp - 90 = 50 - 100

Sp = - 50 + 90 = 40

Therefore, If Ricardian neutrality holds true, after this change in the government's budget, private savings will equal 40.

7 0
3 years ago
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