All categories

2 years ago

According to the capital asset pricing model, what is the expected return on a security with beta of 1?

Business

1 answer:

Mamont248 [21]2 years ago

6 0

According to the capital asset pricing model, the expected return on a security is the average market return.

A market is a system, institution, process, social relationship, or infrastructure configuration that parties exchange. Although parties can exchange goods and services through barter, most markets rely on sellers offering goods and services to buyers in exchange for money.

A market is a place where buyers and sellers meet to facilitate the exchange or trade of goods and services. A marketplace can be physical, like a retail store, or virtual, like an e-merchant. Other examples include illegal markets, auction markets, and financial markets.

Marketplace, the means by which the exchange of goods and services takes place through contact between buyers and sellers, either directly or through intermediaries or institutions.

Learn more about market here:brainly.com/question/25754149
#SPJ4

You might be interested in

Frasier Cabinets wants to maintain a growth rate of 5 percent without incurring any additional equity financing. The firm mainta

KATRIN_1 [288]

Answer:

Option E is correct. Pay out ratio is 73.74 %

Explanation:

Payout ratio shows how much portion of the net earning the company pay to its shareholders in form of cash dividend. Higher pay out ratio implies that company pay large portion of its earning to shareholder.

Mathematically, pay out ratio is = 1 - Retention Ratio ------ (a)

Retention ration shows portion of the earning that the company has retained for future investment or operation or growth.

Given data

Growth rate = 5 % or 0.05

Debt to equity ratio = 0.55

Assets turn over = 1.30

Profit Margin = 9 % or 0.09

Retention ration can be calculated from sustainable growth ratio formula.

Sustainable growth rate = Retention ratio x Return on equity

Sustainable growth rate means the growth rate that the company wants to maintain in future.

Retention ratio = Sustainable growth rate / Return on equity ---- (b)

Return on equity is not given the question but it can be calculated from Du Pont equation.

According to Du Pont equation,

Return on Equity = Profit Margin x Assets Turn Over x Financial leverage

Return on Equity = 0.09 x 1.30 x ( 1 + 0.55) = 0.18135

Let r be retention ratio, Then

Sustainable growth rate = (0.18135 x r)/ ( 1- (0.18135 x r))

0.05 = (0.18135 x r)/ ( 1- (0.18135 x r))

r = 0.2626 = Retention ratio

Putting the value of retention ratio in equation (a)

Payout ratio = 1 - Retention ratio = 1 - 0.2626 = 0.7374 or 73.74 %.

4 0

3 years ago

On July 8, Jones Inc. issued an $75,700, 8%, 120-day note payable to Miller Company. Assume that the fiscal year of Jones ends o

Marizza181 [45]

Answer:=Jones recognizes $386.9 as interest

Explanation:

Fiscal year ending July 31st

there are 23 days between when the cash as issued ie July 8 and the end of the fiscal year on July 31st

Given amount or Principal amount = $75,700

Rate= 8%

Interest = Principal x Rate x Time

$75,700 x 8% x 23/360=$75,700 x 0.08 x 23/360

=$386.9

Jones recognizes $386.9 as interest in the current fiscal year.

3 0

3 years ago

The following are some changes that may take place in the market for textbooks. For each of the following, indicate what will ha

Butoxors [25]

The demand curve will shift right.

(b.)The supply curve will shift right.

(c.)The demand curve will shift left

(d.)The supply curve will shift right.

(e.)The demand curve will shift left.

The demand curve is a graphical depiction of the connection between the cost of a commodity or service and the amount demanded over a specific time period. A common representation will have the price on the left-hand vertical axis and the amount needed on the right-hand horizontal axis. The law of demand states that, when all other factors are equal, the quantity demanded for a given good will decrease as its price rises as shown by the demand curve moving from left to right. Keep in mind that this formulation suggests that quantity is the dependent variable and price the independent variable. The independent variable often appears on the horizontal axis, or x-axis, although economics is an exception.

Learn more about demand curve here

brainly.com/question/14252371

#SPJ9

7 0

1 year ago

Each of the following is a reason to export data except ___

aleksandrvk [35]

Explanation:

most data exports are for backing up purposes, creating presentation and ability to access old files

3 0

2 years ago

Select the correct answer.

nasty-shy [4]

It’s debtor because of the user

5 0

2 years ago