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kramer
2 years ago
7

Assume a firm has a beta of 1.2. All else held constant, the cost of equity for this firm will increase if the: beta decreases.

market risk premium decreases. risk-free rate decreases. either the risk-free rate or the market rate of return decreases. market rate of return decreases.
Business
1 answer:
eduard2 years ago
4 0

Answer:

Risk-free rate decreases

Explanation:

The CAPM formula for calculating cost of equity requires one to know the value of 3 pieces of information only:

1. the market rate of return,

2. the beta value

3. the risk-free rate.

Ra = Rrf + [Ba∗(Rm−Rrf)]

where:

Ra=Cost of Equity

Rrf = Risk-Free Rate

Ba = Beta

Rm=Market Rate of Return

​From the formula

Ra = Rrf + [1.2∗(Rm−Rrf)]

Ra = Rrf + 1.2Rm - 1.2Rrf

From Ra = 1.2Rm -0.2Rrf

From the expression above, it can be seen that the lower the value of Rrf (Risk-Free rate), the higher the value of Ra.

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Answer:

Government Budget is considered as the prevalent piece of its organization which oversees the income and the use of the US country. The Budget has the goal of guaranteeing the ideal assignment for the open government assistance decisions in the territory of Health, Education, Infrastructure, Defense and Corporate undertakings, and so forth. Despite the fact that US country dispenses gigantic assets so as to spend on social government assistance objectives, it faces the basic circumstance of spending shortage with the significant drop in the GDP in the hour of downturn period.  

The impact on the Long-run capital stock per specialist will be decreased to the impressive impact. The impact will be over the long haul with the activity of overcoming any issues between the work openings and the pace of the amount of the creation units. As it was referenced before that the steady status of Private Savings is reflected in the activity of US national government by disbanding the shortage spending plan. This will turn showed the away from of amount of creation of merchandise and enterprises expanded by giving more motivations and making increasingly corporate based foundation offices to the business people. So it gave ideal work offers to the talented representatives. So we can express the impacts of the since quite a while ago run capital stock per specialist.  

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4 0
3 years ago
A company's triple bottom line measures which aspects of its performance? (choose every correct answer.)
san4es73 [151]

A company's triple bottom line measures environmental, financial, and social. aspects of its performance.

Environmental means relating to or caused by the environment in which a person lives or in which something exists. Protects against environmental influences such as wind and sun. The form that the human family takes is a response to environmental stress.

Financial usually refers to financial matters or transactions of some magnitude or importance. In other words, a financial assistant. Fiscal is used specifically in connection with government or institutional funds. It's the end of the fiscal year. Currency refers specifically to money itself. i.e. currency system or standard.

Relating to interaction with other people especially for pleasure a busy social life.

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8 0
1 year ago
Return to questionItem 6Item 6 E8-16 Analyzing and Interpreting Receivables Turnover Ratio and Days to Collect [LO 8-4] FedEx Co
madreJ [45]

<u>Solution and Explanation:</u>

The following formulas will be used in order to calculate the accounts receivable turnover ratio and in order to find out the number of days collect.

Accounts receivable turnover ratio = Net sales divided by Average net Accounts receivable

=\$ 50,370 /[(\$ 7,250+\$ 5,720) / 2]

=\$ 50,370 / \$ 6,485

= 7.77 times

<u>Days to collect</u> = 365 divided by Accounts receivable turnover ratio

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4 0
3 years ago
Your friend, Marco, offers to share with you a paper he wrote for his Introduction to Business class last semester. When you tel
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Answer:

The correct answer is: <u>Is it balanced?</u>

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This question based on ethics would be the most appropriate to assess these situations. Because when you confront your friend that it would not be fair and ethical for him to share an article written by him to be used as if you had written it, he responds to you with behavior that you consider unethical, but in these situations there is no balance comparison, as they are different situations.

Ethical issues seek to solve conflicting problems and dilemmas.

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3 years ago
The JPY/AUD spot exchange rate is 82.42, the JPY interest rate is 0.15%, and the AUD interest rate is 4.95%. If the interest rat
defon

Answer:

The answer is B. -97.7.

Explanation:

As the question gives us the spot rate, the interest rates of two countries, We can apply the covered interest parity to calculate the 90-day forward exchange rate JPY/AUD from which 90-day forward points can be derived.

F = S x ( 1+ Rjpy) / ( 1+ Raud); in which Rjpy denoted as JPY interest rate ( 0.15% per annum) while Raud is AUD interest rate ( 4.95% per annum).

F = 82.42 x (1+ 0.15% x 90/360) / ( 1 + 4.95% x 90/360) = 81.443

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