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kow [346]
3 years ago
11

The expected return on the market portfolio is 19%. The risk-free rate is 12%. The expected return on SDA Corp. common stock is

18%. The beta of SDA Corp. common stock is 1.40. Within the context of the capital asset pricing model, _________.
Business
1 answer:
trasher [3.6K]3 years ago
7 0

Answer:

SDA Corp. Stock Alpha is 3.80%

Explanation:

If we calculate the expected return on SDA Corp. stock through Capital asset pricing model, we will get:

CAPM = Risk Free Rate + (Return on market portfolio - Risk free rate) * Beta

CAPM = Rf + (Rm - Rf)*β

CAPM = 12% + (19% - 12%)*1.40

CAPM = 12% + 9.8%

CAPM = 21.8%

The expected return on stock through CAPM is 21.8%, whereas, the expected return of SDA Corp. common stock is 18%. Therefore, the stock Alpha is 21.8% - 18% = 3.80%

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The euro is the common currency across Europe.
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Why it is important for alsa management to understand the importance of social media for their work
alina1380 [7]

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Explanation:

3 0
3 years ago
Ckson's Programming paid its June of $500 cash. demonstrate how to use the accounting equation to record the transaction by comp
Dvinal [7]

Answer:

Decrease <u>Cash </u>and Increase <u>Expense</u>

Explanation:

Jackson Programming paid $500 as rent for the month of June.

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In Jackson Programming;

A decrease is recorded in CASH because cash was paid, while an increase is recorded in EXPENSE because there is a corresponding increase in rent expenses.

5 0
3 years ago
The economic term used to describe the government's influence on savings and changing the levels of government spending is ___.
Tresset [83]

Answer:

Fiscal policy

Explanation:

Fiscal policy -

The term fiscal policy is based on the idea of British economist John Maynard Keynes .

It is the policy by which the government spending and policies of tax are used in order to alter the economic growth , inflation , deflation , employment , services etc, is referred to as fiscal policy.

Hence, from the given information of the question,

The correct term is fiscal policy.

3 0
4 years ago
Cordelia is an employee of Snaktyme Foods in Missouri. She earns $24,000 annually. Snaktyme has provided uniforms worth $350 and
Aleks04 [339]

Answer:

option (B) 31,500

Explanation:

Data provided in the question:

Annual earning = $24,000

Worth of uniform = $350

Training worth = $850

Contribution to 401(k) = half of  4% of earning

= 0.5 × 0.04 × $24,000

= $480

monthly amounts toward her insurance:

health = $125

Life = $50

AD&D = $30

Total annual amounts toward her insurance = 12 × [ $125 + $50 +$30 ]

= 12 × 205

= $2,460

Therefore,

Employer taxes and insurance = 14% of $24,000

= $3,360

Therefore,

Cordelia's total annual compensation

= $24,000 + $350 + $850 + $480 + $2,460 + $3,360

= $31,500

Hence,

Answer is option (B) 31,500

4 0
3 years ago
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