When a company exchanges 200 shares of stock worth $20 each for 100 shares worth $40 each, they are using reverse stock split.
A reverse stock split is a corporate action in which a firm or a company reduces the number of shares it has outstanding by a set multiple. For example, if a company announces a reverse stock split of 1:50, this means that once the split occurs investors will receive one share for every 100 shares they own.
Answer:
The Beta is 1
The required return increases to 13%
Explanation:
The formula for required return is given below:
Required Return = Risk-Free Rate of Return + β(Market Return – Risk-Free Rate of Return)
required return is 11%
risk-free rate of return=7%
Beta is unknown
market return-risk free rate of return is market risk premium is 4%
11%=7%+beta(4%)
11%-7%=beta*4%
4%=beta*4%
beta=4%/4%
beta=1
If the market risk premium increased to 6%,required return is calculated thus:
required return=7%+1(6%)
required return =13%
This implies that the riskier the stock, the higher the market risk premium, the higher the required return to investors.
<span>Credit card has slightly lower interest rate.
Let's take a look at both interest rates for 1 year and see what costs more. First, the credit card at 17% apr compounded monthly.
Each month, 17%/12 interest will be taken. The total interest over the year will be
(1 + 0.17/12)^12 = 1.183891728 times the original debt.
Now let's look at the loan from the parents. Over 1 year, you'll be accumulating 2 interest payments. The formula for the year will be
(1 + 0.09)^2 = 1.1881
Comparing the overall rate between the credit card and the parents, the credit card is slightly lower than the parents.</span>
The answers to the question are:
- The machine that is the constraint is the machine c.
- The product m = 80 units and n = 80 units
- Net profit = $3600
<h3>1. How to solve for the constraint of the machine</h3>
We have to solve for the workload of the machines
For A. 20*100 = 2000
For B, 5 * 100 + 10 *80
= 500 + 800 = 1300
For Machine C = 15 * 100 + 15 * 80
= 1500 + 1200
= 2700
The time at the workstation in c is more than the constant time of 2400, hence the constraint that we have is machine c.
b. 2400- 1200 = 1200
The product mix would be 1200/15
= 80
Hence the product mix m = 80 units and that of n = 80 units
<h3>c. The total net profit</h3>
80*$90 = 7200 , 80 * 105 = 8400
7200 + 8400
= 15600
The net profit = 15600 - 12000
= $3600
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