Most businesses in the United States are a. corporations b. proprietorships c. separate entities d. partnerships

The market price of a security is $26. Its expected rate of return is 13%. The risk-free rate is 5%, and the market risk premium

DedPeter [7]

The increase in stock risk has lowered its value by 16.09%.

<h3>What does market price mean?</h3>

The price at which a good or service can currently be bought or sold is known as the market price.
The forces of supply and demand determine the market price of a good or service; the price at which the quantity supplied and demanded are equal is the market price.

<h3>What is current price and market price?</h3>

Market value is another name for the current price. It is the last traded price for a share of stock or any other security.

According to the question:

If the security's correlation coefficient with the market portfolio doubles (with all other variables such as variances unchanged), then beta, and therefore the risk premium, will also double. The current risk premium is: 13% - 5% = 8%

The new risk premium would be 16%, and the new discount rate for the security would be: 16% + 5% = 21%

If the stock pays a constant perpetual dividend, then we know from the original data that the dividend (D) must satisfy the equation for the present value of a perpetuity:

Price = Dividend/Discount rate.

26 = D/0.13.

D =26 x 0.13.

D = $3.38.

At the new discount rate of 21%, the stock would be worth:

$3.38/0.21.

= $16.09.

The increase in stock risk has lowered its value by 16.09%.

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5 0

2 years ago

Choose and describe a business that you would expect to have highly liquid assets and share a photo of that business (or company

Slav-nsk [51]

Answer:

I have chosen Apple Inc.

Explanation:

Apple Inc is a tech giant and manufactures innovative and most differentiated telecommunication products, music products, computer products, application services, etc which is highly valued among its customers. That's the reason why Apple is one of the most highly valued company in the world with almost $137 billion cash balance. This cash balance has been increased by $20 billion in the last three years which shows its higher profitability and that its inventory is highly liquid asset because it is quickly converted into cash. Furthermore, the greater demand of product and customer loyalty has strengthen its position all because of unmatched innovation introduced in each of its product every year. The greater cash balance shows that the company has greater sales and has higher profit margin on its unmatched product.

The picture of Apple headquarter and of its logo are given below:

6 0

3 years ago

Thornton, Inc., had taxable income of $128,267 for the year. The company's marginal tax rate was 35 percent and its average tax

valentinak56 [21]

Answer:

$30784.08

Explanation:

Taxable income can be refer to as the amount of income used to calculate how much tax an organisation owes to the government in a particular tax year.

Thornton Inc. had taxable income of $128,267 for the year

The company's marginal tax rate is 35 percent

The company's average tax rate is 24 percent

To know how much did the company have to pay in taxes for the year, we multiply the Taxable income by the Company Average tax rate for the year.

=$128,267 * 24%

=$128,267 * 0.24

=$30784.08

Thornton Inc will pay $30784.08 for the year.

8 0

3 years ago

Maxim manufactures a hamster food product called Green Health. Maxim currently has 15,500 bags of Green Health on hand. The vari

zaharov [31]

Answer:

b. $13,200.

Explanation:

Revenue from the sale of Green Health bags = Number of bags * Selling price

Revenue from the sale of Green Health bags = 15,500 bags * $10

Revenue from the sale of Green Health bags = $155,000

Revenue from Premium Green = Number of bags * Selling price

Revenue from Premium Green = 15,500 bags * $9

Revenue from Premium Green = $139,500

Revenue from Green Deluxe = Number of bags * Selling price

Revenue from Green Deluxe = 4,100 bags * $7

Revenue from Green Deluxe = $28,700

Incremental revenue = Revenue from Premium Green + Revenue from Green Deluxe - Revenue from Green Health\

Incremental revenue = $139,500 + $28,700 - $155,000

Incremental revenue = $13,200

So, the incremental revenue of processing Green Health further into Premium Green and Green Deluxe would be $13,200.

6 0

3 years ago

Settings alzania produces and consumes 500,000 tons of cotton during a year. Reports indicate that alzania's neighbor, which a

UkoKoshka [18]

Answer: C- Alzania's neighbor exported half its production of cotton that year

Explanation: Alzania produces and consumes 500,000 tons of cotton during a year. While, the neighbor which also employs the same number of people in the cotton industry, consumed 400,000 tons of cotton. There is no information on production of the neighbor. Just by looking at the consumption units we can argue that Alzania has an absolute advantage over the neighbor as it consumes more. However, if there is any information on the amount of exports of cotton from the neighbor then it will weaken the absolute advantage conclusion.

Thus, if <em>Alzania's neighbor exported half its production of cotton that year </em>the total production of cotton is greater of the neighbor than Alzania.

6 0

3 years ago