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mafiozo [28]
3 years ago
11

Miller Stores has an overall beta of 1.38 and a cost of equity of 12.7 percent for the company overall. The firm is all-equity f

inanced. Division A within the firm has an estimated beta of 1.52 and is the riskiest of all of the company's operations. What is an appropriate cost of capital for Division A if the market risk premium is 7.4 percent? Multiple Choice 13.12 percent 13.74 percent 12.63 percent 12.77 percent 13.01 percent
Business
1 answer:
mojhsa [17]3 years ago
8 0

Answer:

MILLER STORES

Ke = Rf + β(Market risk premium)

12.7 = Rf + 1.38(7.4)

12.7 = Rf + 10.212

Rf = 12.7 - 10.212

Rf = 2.488%

DIVISION A

Ke = Rf + β(Risk premium)

Ke = 2.488  + 1.52(7.4)

Ke = 2.488 + 11.248

Ke = 13.74%

Explanation:

First and foremost, we need to calculate risk-free rate using the data relating to Miller Stores. In this case, the cost of equity, beta and market risk premium of Miller Stores were provided with the exception of risk-free rate. Then, we will make risk-free rate the subject of the formula.

We also need to calculate the cost of capital of division A, which is risk-free rate plus beta multiplied by the market risk-premium.

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Firms are very small relative to the market. Firms have significant price control. Firms produce very similar products. There is
Anika [276]

Answer:

  1. Firms are very small relative to the market. PERFECT COMPETITION
  2. Firms have significant price control. NOT PERFECT COMPETITION - in perfect competition all firms are price takers.
  3. Firms produce very similar products. PERFECT COMPETITION
  4. There is a large number of firms. PERFECT COMPETITION
  5. There are significant barriers to entry and exit to the market. NOT PERFECT COMPETITION - in perfect competition there is free market entry and exit
  6. Firms have no price control. PERFECT COMPETITION
  7. Firms produce differentiated products. NOT PERFECT COMPETITION - in perfect competition firms produce homogeneous products.

7 0
3 years ago
Fin has been a new manager for a couple of weeks. over time, he realizes his team likes to socialize during meetings, which tend
iragen [17]

Answer:

create a relevant agenda for every meeting and stay on point by re-directing non-work related topics back to agenda items.

Explanation:

Fin is the manager, he might be new at the job but it is his responsibility to direct and control his subordinates. Managing isn't easy and maybe some of his staff will not like him directing and controlling what is said during the meetings, but it is his job. If he is not fit to do it, then he should have chosen another job or another career.

Every career and job has its own level of difficulty and things getting tough or difficult is no excuse. Just like a firefighter rushes into a burning house because it is his/her job, controlling the meeting is Fin's job.

7 0
3 years ago
(-2a+5)(3a+4)<br><img src="https://tex.z-dn.net/?f=%28%20-%202a%20%2B%205%29%283a%20%2B%204%29" id="TexFormula1" title="( - 2a +
vichka [17]
Simplifying
(2a + 5)(3a + -4) = 0

Reorder the terms:
(5 + 2a)(3a + -4) = 0

Reorder the terms:
(5 + 2a)(-4 + 3a) = 0

Multiply (5 + 2a) * (-4 + 3a)
(5(-4 + 3a) + 2a * (-4 + 3a)) = 0
((-4 * 5 + 3a * 5) + 2a * (-4 + 3a)) = 0
((-20 + 15a) + 2a * (-4 + 3a)) = 0
(-20 + 15a + (-4 * 2a + 3a * 2a)) = 0
(-20 + 15a + (-8a + 6a2)) = 0

Combine like terms: 15a + -8a = 7a
(-20 + 7a + 6a2) = 0

Solving
-20 + 7a + 6a2 = 0

Solving for variable 'a'.

Factor a trinomial.
(-5 + -2a)(4 + -3a) = 0

Subproblem 1
Set the factor '(-5 + -2a)' equal to zero and attempt to solve:

Simplifying
-5 + -2a = 0

Solving
-5 + -2a = 0

Move all terms containing a to the left, all other terms to the right.

Add '5' to each side of the equation.
-5 + 5 + -2a = 0 + 5

Combine like terms: -5 + 5 = 0
0 + -2a = 0 + 5
-2a = 0 + 5

Combine like terms: 0 + 5 = 5
-2a = 5

Divide each side by '-2'.
a = -2.5

Simplifying
a = -2.5
Subproblem 2
Set the factor '(4 + -3a)' equal to zero and attempt to solve:

Simplifying
4 + -3a = 0

Solving
4 + -3a = 0

Move all terms containing a to the left, all other terms to the right.

Add '-4' to each side of the equation.
4 + -4 + -3a = 0 + -4

Combine like terms: 4 + -4 = 0
0 + -3a = 0 + -4
-3a = 0 + -4

Combine like terms: 0 + -4 = -4
-3a = -4

Divide each side by '-3'.
a = 1.333333333

Simplifying
a = 1.333333333
Solution
a = {-2.5, 1.333333333}
6 0
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Which of the following would NOT affect your FICO score?
Elodia [21]
D) Which is Defaulting on a loan!
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2 years ago
Sarjit and Rhonda have both recently completed graduate level training in liberal arts programs. Although they studied in differ
andre [41]

Economic classes refer to the position of people on the earning ladder. For Sarjit and Rhonda, the theory that classifies them into the same economic class is that of;

  • Karl Marx

According to Karl Marx, there are two economic classes, namely, the bourgeoisie and the proletariat. The bourgeoisie are the rich and working-class members of society while the proletariats are the workers.

Given this classification, Sarjit and Rhonda belong to the same economic class of workers.

Learn more here:

brainly.com/question/731472

3 0
3 years ago
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