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balandron [24]
2 years ago
15

Calculate the required rate of return for an asset that has a beta of 1.73​, given a​ risk-free rate of 5.3​% and a market retur

n of 9.9​%. b. If investors have become more​ risk-averse due to recent geopolitical​ events, and the market return rises to 12.7​%, what is the required rate of return for the same​ asset?
Business
1 answer:
Mumz [18]2 years ago
5 0

Answer:

 

(a)    13,3%

(b) 18,1%

Explanation:

To calculate the required rate of return for an assets it's necessary to use the CAPM (Capital Asset Pricing Model) model which considers these variables to estimate the required return of an assets, the model states the next:

ER = Rf  +   Bix( ERm - Rf )  

ER : Expected Return of Investment    

Rf : Risk-Free Rate    

Bi : Beta of the Investment    

ERm : Expected Return of the Market    

(Erm-Rf) :    Market Risk Premium    

It tries to explain the relationship between the systematic risk ((Erm-Rf  Market Risk Premium) of the market and the expected returns for assets.

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3 years ago
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The concept "bureaucracy" refers to
Vera_Pavlovna [14]

Answer:

d. An organizational model rationally designed to perform task efficiently.

Explanation:

Bureaucacy is an organization plan that performs daily activities like division of labour, has standardize processes and responsibilities. In bureaucracy, there is relationship between employees, hierarchies and duties are clearly spelt.

An example of bureaucracy is car production department. The department involves so many processes, division of labour and interpersonal relationships among employees.

Thus, bureaucracy tends to perform tasks efficiently due to a number of inputs required to complete the process.

6 0
2 years ago
Verma, Inc. sells office furniture. In 2021, it sold 200 desks for $500 each. For each desk sold, Verma distributed a 50% discou
Effectus [21]

Answer:

$12

Explanation:

The standalone price is the price at which the seller (Verma) would sell its products or services (discount coupon) separately to other customers.

to determine the standalone price of the discount coupon we must multiply the change in discount by the expected use of the coupons:

  • change in discount = $150 x (50% - 10%)  = $150 x 40% = $60
  • expected use = 20%

= $60 x 20% = $12

3 0
3 years ago
Using the following information, prepare a vertical analysis of two years' income statements. Fees Earned is $153,500 for Year 2
pishuonlain [190]

Answer:

Following Statement is true

Operating income has increased as a percentage of revenue.

Vertical Analysis

                                                                        Year 2            Year 1        

Fees Earned                                                  $153,500       $149,700

Operating expenses                                     <u>$122,800</u>       <u>$127,245</u>

Operating Income                                          $30,700        $22,455

Operating Income as percentage of sales       20%               15%

Operating Income as percentage of sales is increased in year 2.

<u>Which of the following statements are true?</u>

Operating income has decreased as a percentage of revenue.

Operating income has increased as a percentage of revenue.

None of these choices are correct.

Operating expenses have increased as a percentage of revenue

7 0
3 years ago
Fev and Company has a projected balance sheet that includes the following accounts. Cash $ ? Marketable securities 228,000 Accou
Thepotemich [5.8K]

Answer:

C. $ 344,000

Explanation:

In the balance sheet, the assets, liabilities, and stockholder equity is recorded. In this the accounting equation is used which is shown below:  

Total assets = Total liabilities + stockholder equity  

which equals to

Total assets = $1,570,000 + $2,382,000

                    = $3,952,000

And, the total assets equal to

Total assets = Cash + Marketable securities + Accounts receivable + Inventory + Non-current assets

$3,952,000 = Cash + $228,000 + $860,000 + $490,000 + $2,030,000

$3,952,000 = Cash + $3,608,000

So, the cash would be

= $344,000

7 0
3 years ago
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