Ask question

Ask question

All categories

4 years ago

6

What is the expected yield on the market portfolio at a time when Treasury bills are yielding 6%, and a stock with a beta of 1.5

is expected to yield 18%

1 answer:

Naddik [55]4 years ago

7 0

Answer:

8%

Explanation:

According to CAPM :

expected stock yield =risk free rate + (beta x market yield)

6% + 1.5 x market yield = 18%

18% - 6% = 1.5market yield

solving for market yield gives

market yield = 8%

You might be interested in

Although a major advantage of the corporate form of entity is the liability protection for its principals, there are some cases

Triss [41]

Answer:

A) This is called piercing the corporate veil and may result in significant liability for the corporation's principals.

Explanation:

The phrase "Piercing the corporate veil" is used to describe a situation where a court will put aside limited liability and hold a corporation's shareholders or directors liable for the actions and liabilities of the corporation.

This is not a common procedure and courts usually do this based on the following:

"unity of interest and ownership": interest of the shareholders doesn't stand together anymore.
"wrongful conduct": illegal or wrongful actions by the directors or shareholders.
"proximate cause": as a result of the illegal or wrongful actions, other parties were harmed.

6 0

3 years ago

Use the punnett square from the introduction and the ones you drew for part a to select the three statements that are true about

Julli [10]

Any images or dominant or recessive traits to make it?

6 0

3 years ago

Duk Yu, a beverage company, buys its raw materials from Nessange, a fruits and vegetables exporting company, without making any

laila [671]

Answer:

Trade credit

Explanation:

Trade credit is a financial tool which buyer is allowed by supplier to buy now and pay later. Payment date is pre-decided. It is generally used for financing on short term basis.

5 0

3 years ago

Paul Inc. forecasts a capital budget of $725,000. The CFO wants to maintain a target capital structure of 45% debt and 55% equit

defon

Answer:

If the company follows the residual dividend policy, the income he must earn is $898,750

The dividend payout ratio will be 55.63%

Explanation:

In order to calculate the income must it earn we would have to make the following calculation:

income must it earn=55% equity+dividends

55% equity=$725,000*0.55

55% equity=$398,750

Therefore, income must it earn=$398,750+$500,000

income must it earn=$898,750

If the company follows the residual dividend policy, the income he must earn is $898,750.

To calculate the dividend payout ratio we would have to calculate the following formula:

dividend payout ratio=dividends paid/income must it earn

dividend payout ratio=$500,000/ $898,750

dividend payout ratio=55.63%

The dividend payout ratio will be 55.63%

4 0

4 years ago

How does Quickbooks online use smart learning?

kvasek [131]

Answer:

Quick Books Online uses smart learning in its reconciliation tool to help find any rogue transactions by recognizing if transactions have been excluded erroneously from bank feeds. Because bank feeds includes all transactions of bank account. What 2 reasons might mean a transaction needs to be excluded in bank feeds?

Explanation:

4 0

3 years ago

Read 2 more answers