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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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Sophie is attending college next year. She just got information on the college costs and the financial aid package the college i
Katarina [22]

Answer:

B. $3,750

Explanation:

Sophie will need to add up all her costs (tuition, room and board) and then add up all her funding sources (financial aid/money from parents). The difference between these two amounts is what is still owed which she will have to pay from her own savings or loans.

Costs: 11,750+11,500 = 23,250

Funding: 9000+7000+3500= 19,500

$23,250 - $19,500 = $3,750

8 0
3 years ago
Read 2 more answers
From 1973 through​ 2016, the rise in the British price level relative to the U.S. price level is​ ____ with a rise in the value
babunello [35]

Answer:

the available options for this question are,

A. associated; does not

B. associated; also does

C. not associated; does

and the correct answer is option B. associated; also does.

the purchasing power means the ability of a currency unit to purchase a specific amount of goods and services and this is directly in line with the internal inflation rate of an economy.

Explanation:

8 0
4 years ago
The _______ market is a market in which an investor purchases financial securities (via an investment bank) directly from the is
amm1812

Answer:

primary; secondary

Explanation:

The primary market is the market where the securities are to sold for the first and foremost time i.e. initial public offering through investment bank

While on the other hand, the secondary market is the market where the securities are traded by the investors and they deal with the existed securties

So the fill in the banks could be filled with the primary and secondary

7 0
3 years ago
Goal B, goal C, goal D, and goal E are on a timeline from left to right, in that order. Which goal is to be accomplished first?
AlexFokin [52]

Answer: A. Goal B

Explanation: Goal B is to be accomplished first. This is because on a timeline, the events closest to the present are on the left, and the events that happen far in the future are on the right.

5 0
3 years ago
Oscar has negotiated a lease for his sporting goods store in which he is required to pay $2,500 per month in rent. Oscar pays hi
AfilCa [17]

Answer:

The Oscar's fixed costs per month is $2,500

Explanation:

Fixed cost: The fixed cost is that cost in which the amount is remain fixed whether production level change or not, that means it does not have any effect on the production level.

In the given question,

Monthly rent is $2,500 which is fixed so, it would be considered as fixed cost

The per hour pay and electrical bill depend upon the total hours of operation which means if the more hours, the workers are engaged so more pay will be give to them, and more electricity bill come.

And if they are working few hours, than less rate and less electrical bill will be there which reflects the variable cost. So, these cost are considered variable cost. Thu, it would not be included in the fixed cost.

Hence, Oscar's fixed costs per month is $2,500

6 0
3 years ago
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