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Fynjy0 [20]
2 years ago
10

Westsyde Tool Company is expected to pay a dividend of $1.50 in the upcoming year. The risk-free rate of return is 6%, and the e

xpected return on the market portfolio is 14%. Analysts expect the price of Westsyde Tool Company shares to be $29 a year from now. The beta of Westsyde Tool Company's stock is 1.2. Using the CAPM, an appropriate required return on Westsyde Tool Company's stock is _________. Group of answer choices 16.8% 15.6% 10.8% 8%
Business
1 answer:
lawyer [7]2 years ago
7 0

Answer:

Return on company's stock = 15.6%

Explanation:

<u><em>The capital asset pricing model (CAPM)</em></u><em> relates the price of a share to the market risk or systematic risk. The systematic risk is that which affects all the all the economic agents, e.g inflation, interest rate e.t.c</em>

Using the CAPM , the expected return on a asset is given as follows:

E(r)= Rf +β(Rm-Rf)

E(r) =? , Rf- 6%, Rm- 14%, β- 1.2

E(r)  = 6% + 1.2× (14- 6)%

        = 6%  + 9.6%

         = 15.6%

Return on company's stock = 15.6%

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Omega Company makes and sells jungle gyms and tree houses for children. For jungle gyms, the price is $150 and the variable expe
Whitepunk [10]

Answer:

b 5:3

Explanation:

Jungle gym sales unit : tree sales unit

10,000 : 6,000

10,000 / 6000

= 5/3

=5:3

6 0
2 years ago
Read 2 more answers
Most farmers own wells and tube-wells in their farms for irrigation to increase their produce, what adverse effect can this have
Mrac [35]

Most farmers own wells and tube wells on their farms for irrigation to increase their production, which affects the water level. Thus, option B is correct.

<h3 /><h3>Who is a farmer?</h3>

A farmer is someone who does agribusiness and cultivates living things for food or natural goods like crops, cotton, etc.

The farmers would have wells and tube well on the farm because the irrigation to be much at a higher level with water reduces the water level of the ground to a significant amount which would in the future affect the soil plantation as well the soil binding capacities

There will be a large-scale depletion in the water that is present underground. Therefore, option B is the correct option.

Learn more about farmers, here:

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A decrease in agriculture output

B reduction of the water level

C loss of capital

D loss of soil fertility

5 0
1 year ago
Which Of the following is the most important academic skill that you would need in a scientific career?
Svetlanka [38]

Research skills

(Time management is lower on the totem pole while the other 2 are on the bottom)

8 0
3 years ago
Read 2 more answers
The following information is taken from the records of Erie Corp.(in thousands) for the year ended on December 31: 2019 2018 Sal
den301095 [7]

Answer:

<u>Favourable Changes:</u>

Sales

Gross Profit

Operating Income

Interest Expense

Net Income

<u>Unfavourable Changes:</u>

Cost Of Sales  

Selling Expenses  

General Expenses

Other Revenue

Income Taxes

Explanation:

Observe Movement from 2018 results to 2019 results

                                        Erie Corp

                   Vertical Analysis of Income Statement

                                                                2019                    2018

Sales                                                        1,397                    1,122

Less Cost Of Sales                                   935                      814

Gross Profit                                               462                      308

<u>Less Operating Expenses</u>

Selling Expenses                                      154                       121

General Expenses                                     88                        77

Operating Income                                   220                       110

<u>Less Non- Operating Expenses</u>

Other Revenue                                            4                          7

Interest Expense                                         2                          9

Income Taxes                                           134                        66

Net Income                                                88                        42

8 0
2 years ago
All of the following statements regarding leases are true except : A. For a capital lease the lessee records the leased item as
faust18 [17]

Answer: B. Capital leases do not transfer ownership of the asset under the lease, but operating leases often do.

Explanation:

When using Capital Leases, the lessee will record the lease as if it were their own asset and as a result will also depreciate it. The lessee will also create a long term liability on their balance sheet for the asset.

Capital leases usually also involve a transfer of ownership to the lessee at the end of the lease term. Operating Leases on the other hand do not have these features. They are more like a rental of an asset and as such are recorded as a rental expense in the books of the lessee. The ownership remains with the lessor in an Operating Lease and the asset will be returned once the lease period is over.

5 0
3 years ago
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