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Fynjy0 [20]
3 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]3 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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Pizza International, Inc., reported the following information (in thousands): Operating Activities Net Income $ 236 Depreciation
Aleks04 [339]

Answer:

$22,640

The explanation is shown below:-

Explanation:

The computation of cash flow from operating activities using the direct method is shown below:-

                               Direct method

                            Pizza International, Inc.

                          Statement of cash inflow

Cash flow from operating expenses

Cash received from customers       $143,777

($143,951 - $174)

Cash Paid

To suppliers                                      ($53,773)

($45,700 - $651 + $8,724)

To salaries and wages                     ($56,855)

For office expenses                         ($7,730)

($7,785 + $668 - $723)

For income tax expenses               ($2,779)

($50 + $2,729)

Net cash inflow from operating

activities                                            $22,640

It is mainly due to no depreciation expenses for cash products. Depreciation expenses do not contribute to cash outflows. Because of which company has reported large cash inflow from operations compared to near net loss.

3 0
4 years ago
Would you rather own your own business or become a franchise
Lunna [17]

Answer:

own a business

Explanation:

I'm able to create my own brand and free to do what I want

7 0
3 years ago
Zoom sales last year were $435,000, its operating costs including Depreciation were $362,500, and its interest charges were $12,
Ostrovityanka [42]

Answer:

374,000

Explanation:

because 362,500 plus 4,000 equals 364,500 add the last 10,000 and you have 374,500 add the 500 and now you have 375k

8 0
3 years ago
An assembly line is an example of which type of labor strategy? (Select the best answer.) An assembly line is an example of whic
ioda

Answer:

Division of labor

Explanation:

Division of labour is an economic concept which states that dividing the production process into different stages enables workers to focus on specific tasks. If workers can concentrate on one small aspect of production, this increases overall efficiency – so long as there are sufficient volume and quantity produced.

8 0
3 years ago
Read 2 more answers
Max has a written agency agreement with Rufus in which Max will receive all of the listings in the subdivision that Rufus purcha
disa [49]

Answer: It's still in place because it doesn't terminate on the death or incompetence of the principal.

Explanation:

Agreement that exists between people are usually standing so long both parties are still alive, in most cases, the agreement may still stand with the death of one party, depending on what was written or agreed upon by both parties. The agreement between Maxwell and Rufus is still in place because it doesn't terminate on the death or incompetence of the principal.

The agreement would even stand even if one of the party ain't alive anymore.

6 0
3 years ago
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