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Mariulka [41]
4 years ago
14

Piedmont Hotels is an all-equity company. Its stock has a beta of .87. The market risk premium is 7.4 percent and the risk-free

rate is 4.0 percent. The company is considering a project that it considers riskier than its current operations so it wants to apply an adjustment of 2.2 percent to the project's discount rate. What should the firm set as the required rate of return for the project
Business
1 answer:
vovikov84 [41]4 years ago
7 0

Answer:

12.64%

Explanation:

In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

= 4% + 0.87 × 7.4%

= 4% + 6.438%

= 10.438%

The Market rate of return - Risk-free rate of return)  is also known as the market risk premium and the same is applied.

Now the required rate of return would be

= 10.438% + 2.2%

= 12.64%

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Bethany is doing a research project that involves several numbered lists and calculations. She wants to use technology to make t
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Answer:

D

Explanation:

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4 0
3 years ago
Read 2 more answers
The Mason Corporation budgeted overhead at $240,000 for the period for Department A based on a budgeted volume of 60,000 direct
IgorC [24]

Answer:

$8000

Explanation:

Given: Budgeted Overhead $240,000

          Budgeted Labor Hrs 60,000

          Actual Labor Hrs for Job B25 200

          Actual labor cost for B25 $2,200

          Direct Material cost for B25 $5000

Standard/ Budgeted overhead absorption rate = Budgeted Overheads/ Budgeted labor hours = $240,000/60,000 = $4 per labor hours

Budgeted overheads for actual 200 labor hours = 200 × $4 = $800

Labor cost and material cost incurred for Job B25 = $2200 + $5000 = $7200

Add: Budgeted overhead cost for 200 labor hours = $800

Cost of Job B25 = $7200 + $800 = $8000

4 0
3 years ago
Your uncle has $375,000 and wants to retire. He expects to live for another 25 years and to earn 7.5% on his invested funds. How
Alex777 [14]

Answer:

d. $33,641.50

Explanation:

In this question, we use the PMT formula which is shown in the spreadsheet.  

The NPER represents the time period.

Given that,  

Present value = $375,000

Future value = $0

Rate of interest = 7.5%

NPER = 25 years

The formula is shown below:

= -PMT(Rate;NPER;PV;FV;type)

So, after solving this, the answer would be $33,641.50

5 0
4 years ago
Valerie promised to buy Nicole's car for $2,000. Nicole drew up the contract providing that the exchange would occur the next we
Nimfa-mama [501]

Answer:

That the mistake resulted from an accidental clerical error and that it would be unconscionable to enforce the contract.

Explanation:

Nicole mistake is a clerical error.

An error is said to be clerical if it's a mistake that changes the meaning of a document after.

Typographical error and unintentional addition or removal of a word, phrase, or figure in the document can count as clerical error.

Mistakes like this should be readily rectified without objection by the court acting sua sponte, on its own, or on the motion of either party.

8 0
3 years ago
After John worked at a job for 10 years, his salary doubled. If he started at $x, his salary after 10 years is _____.
arlik [135]
What does it mean that his salary doubled?

this means that for example, if it was 1000 dollars, it would be 2000 dollars now, and it if was 2000 dollars, it would be 4000 dollars now.

This can be written down as $2x where x is the initial salary.  (so if x=1000, the new salary is 2x=2*1000=2000
8 0
3 years ago
Read 2 more answers
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