1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
ololo11 [35]
3 years ago
14

Haulsee Inc. pays no dividend currently but is expected to start paying a small dividend next year. The 5-year-old firm has a be

ta of 1.25 and current earnings of $0.90 per share. The current Treasury bill rate is 6.10%, and the market risk premium is 8.8%. Determine Haulsee's cost of equity if the firm's tax rate is 40%.
Business
1 answer:
wlad13 [49]3 years ago
8 0

Answer:

17.10%

Explanation:

The computation of the cost of equity is shown below:

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)

= 6.10% + 1.25 × 8.8%

= 6.10% + 11%

= 17.10%

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

All other information which is given is not relevant. Hence, ignored it

You might be interested in
The price tag on a tennis ball in 1975 read $0.10, and the price tag on a tennis ball in 2005 read $1.00. The CPI in 1975 was 52
tankabanditka [31]

Answer:

Option (a) is correct.

Explanation:

Given that,

In 1975:

Nominal price = $0.10

CPI = 52.3

In 2005:

Nominal price = $1.00

CPI = 191.3

1975 is the base year

Real price in 2005;

= Nominal price in 2005 × (CPI in 1975 ÷ CPI in 2005)

= $1.00 × (52.3 ÷ 191.3)

= $0.273

Therefore, the real price of tennis ball in 2005 is $0.27 in terms of 1975.

The real price of tennis ball in 1975 is $0.10 because the base year is 1975 itself.

When we are comparing the real prices of the years 2005 and 1975, we conclude that tennis ball is cheaper in 1975 as compared to 2005.

7 0
3 years ago
Which best describes the relationship between total utility and marginal utility?.
Whitepunk [10]

Answer:

While total utility measures the aggregate satisfaction an individual receives from the consumption of a specific quantity of a good or service, marginal utility is the satisfaction an individual receives from consuming one additional unit of a good or service.

8 0
2 years ago
Many plant cells have very large membrane covered organelles that can store water and other liquid.
RoseWind [281]
The answer to your question is the vacuole it holds water. the vacuole is responsible for helping the plant stay up right when the vacuole is full the plant is perky and vibrant but when it is empty the plant becomes dull and wilted
6 0
3 years ago
The Miller family owns and operates an interior decorating business. Henry installs hardwood floors and chair rails; Chloe reuph
oksian1 [2.3K]

Answer:

A. specialization.

Explanation:

Specialization refers to dividing the job in different tasks and assigning a person to perform each one which makes that each person becomes an expert in the specific area. This could help to increase productivity, especially in manufacturing. This is the process the Miller family uses because they have divided the tasks and assigned each of them to a person.

4 0
3 years ago
The PE ratio: Assuming Net Income for the year is $250,000, what is the net cash flows from operating activities given the follo
solmaris [256]

Answer:

Net operating cash flow = $189,250

Explanation:

Particulars                                    Amount$

Net income                                    250,000

Add:depreciation expense           9,500

Add:loss on sale of asset              1,250

Add:increase in salary payable    19,500

Less:increase in prepaid rent       (27,500)

Add:increase in AP                        29,500

Less:increase in inventory            <u>(93,000)</u>

Net operating cash flow              <u>$189,250</u>

4 0
3 years ago
Other questions:
  • Transfer payments are:
    5·1 answer
  • Indigo Corporation purchased trading investment bonds for $55,000 at par. At December 31, Indigo received annual interest of $2,
    6·1 answer
  • Allen transfers marketable securities with an adjusted basis of $120,000, fair market value of $300,000, for 85% of the stock of
    13·1 answer
  • Consumers affect which goods and services are produced because they
    8·1 answer
  • The master budget is a.typically for a 1-year period corresponding to the fiscal year of the company. b.the selective financial
    12·1 answer
  • Successful employee participation programs include all of the following except Select one: a. a profit-sharing or gain-sharing p
    15·1 answer
  • The wage is currently $20 per hour. There is no non-labor income.
    5·1 answer
  • Whenever possible, write on a subject _____.
    7·1 answer
  • Economists Kenneth Chay and Michael Greenstone found that in the two years following the passage of the Clean Air Act of 1970, t
    7·1 answer
  • Select the correct answer. cameron purchased an electric guitar for $1,875. the value of the guitar depreciates by 20% each year
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!