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Mariulka [41]
3 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]3 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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Sherry, a 12-year-old, visited a website that wanted to know her family size, her parents' educational level, and her weekly all
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D) Both a and b.

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A situation in which a buyer has limited supplierâ options, is procuring a criticalâ item, needs technologyâ innovation, or is c
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Collaborative relationship

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3 years ago
Jeremy wants to avoid conflict with his new coworkers. he should ______. a. spread gossip with them b. treat them all with respe
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Jeremy wants to avoid conflict with his new coworkers. He should treat them all with respect.

Option B is correct answer.

Conflict in workplace :

Conflict is a difference or disagreement between two or more people. Conflict in the workplace is a normal part of human interaction, yet, handling and resolving conflicts that arise is probably one of the biggest challenges employees face.

What is good conflict in the workplace?

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8 0
2 years ago
You just acquired a home mortgage for 30 years in the amount of $184,500 at 4.65 percent interest, compounded monthly. How much
alex41 [277]

Answer:

EMI=P*r * (1+r)^n/(1+r)^n-1

Where EMI= equal monthly installments

P=Principal amount

r=rate of interest

n=numer of periods

Explanation:

P=$184,500

r=4.65%/12=.3875%

n=30*12=360

EMI=$184,500*.3875%*(1+.3875%)^360/((1+.3875%)^360-1)

EMI=$951

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7 0
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