1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Zinaida [17]
3 years ago
15

Tidewater Fishing has a current beta of 1.16. The market risk premium is 6.8 percent and the risk-free rate of return is 2.9 per

cent. By how much will the cost of equity increase if the company expands its operations such that the company beta rises to 1.18?
Business
1 answer:
netineya [11]3 years ago
7 0

Answer:

increase in cost of equity Ke = 0.14%

Explanation:

given data

current beta = 1.16

market risk premium = 6.8 percent

risk-free rate of return = 2.9 percent

beta rises = 1.18

solution

we get cost of equity when beta β is 1.16

cost of equity Ke = Rf + β ( Rm -Rf ) ................1

cost of equity Ke = 2.9 % + 1.16 ( 6.8% )

cost of equity Ke = 10.788 %

and

cost of equity when beta is 1.18

cost of equity Ke = 2.9 % + 1.18 ( 6.8 % )

cost of equity Ke = 10.924 %

so that

increase in cost of equity Ke = 10.924 % - 10.788 %

so increase in cost of equity Ke = 0.136

increase in cost of equity Ke = 0.14%

You might be interested in
Debt-to-equity ratio is:
babymother [125]
The D/E ratio indicates how much debt a company is using to finance its assets relative to the value of shareholders' equity
5 0
3 years ago
The process of improving the competencies, team member interaction, and overall team environment to enhance project performance
sweet-ann [11.9K]

The process of improving the competencies, team member interaction, and overall team environment to enhance project performance is known as developing Project Team.

Project performance control is the process of creating, implementing, and handling projects that make contributions to the performance of a business enterprise and its method. In place of specializing in project execution, mission overall performance management is ready for the bigger picture.

There are 5 key procedures worried in development and performance measurement: progress dimension making plans, performance size planning, development, and overall performance size execution, monitoring and management, and dimension closure.

A project performance domain is described as a set of related activities which might be crucial for the powerful shipping of challenge results.

Learn more about project performance here brainly.com/question/26402160

#SPJ4

4 0
2 years ago
The gross earnings of the factory workers for Larkin Company during the month of January are $91,000. The employer's payroll tax
cestrela7 [59]

Answer:

Explanation:

The journal entry is shown below:

(a) Factory Labor/Expenses A/c Dr $103,800

        To Factory wages payable               $91,000

         To Employer payroll taxes payable $7,700

         To Fringe benefits payable              $5,100

(Being labor expenses are recorded)

(b) Direct labor A/c Dr   $87192 ($103,800 × 84%)

    Indirect labor A/c Dr $16,608 ($103,800 × 16%)

          To Factory Labor                     $103,800

(Being factor labor is assigned)

7 0
3 years ago
Wiley company purchased new equipment for $60,000. wiley paid cash for the equipment. other costs associated with the equipment
Colt1911 [192]
The total cost of equipment that should be recorded is calculated by adding up all the given values in this item. The costs include equipment cost, transportation cost, tax, and installation cost. Adding up all the values,

     TC = ($60,000) + ($1,000) + ($3,000) + ($2,500)
               TC = $66,500

ANSWER: TC = $66,500
6 0
3 years ago
Gault Corporation had the following shares of stock outstanding on December 31, 2018:
Andreas93 [3]

Answer:

The total amounts payable to preferred stockholders and common stockholders, respectively, are: $480,000 and $320,000.

Explanation:

Cumulative preferred stock has the dominant right over common stocks in term of receiving cash dividend.

The dividend paid to preferred stock per year is: 100 x 20,000 x 8% = $160,000 and the company owed investor 03 years of dividend ( 2016,2017,2018) with the dividend payable amounted to 160,000 x 3 = $480,000.

The dividend paid to common stock is the left over, after paying to preferred stock holders, which is calculated as $800,000 - $480,000 = $320,000.

So, The total amounts payable to preferred stockholders and common stockholders, respectively, are: $480,000 and $320,000.

5 0
3 years ago
Other questions:
  • Martin Enterprises needs someone to supply it with 118,000 cartons of machine screws per year to support its manufacturing needs
    12·1 answer
  • The purpose of having a minimum wage is to _____. a. Educate workers about what they could be making b. Guarantee that workers a
    10·2 answers
  • Rocket Shoe Company is planning a one-month campaign for August to promote sales of one of its two shoe products. A total of $11
    11·1 answer
  • Cole has a cold. Although the brand-name drug is more expensive than the generic, he buys the brand-name one. Cole is familiar w
    6·1 answer
  • Who Is The Richest Man In Togo 2020?
    10·2 answers
  • _______ strategies involve developing and selling new products to people who are already purchasing the firm's existing product
    10·1 answer
  • Raymond and his brother decided to open a computer repair shop together. This is an example of which type of business structure?
    12·1 answer
  • If a landowner purchased a vacant lot six years ago for $25,000, assuming no income or holding costs during the interim period,
    8·1 answer
  • Consider the market for new dvds. If dvd players became cheaper, buyers expected dvd prices to fall next year, used dvds became
    11·1 answer
  • If a policy change causes a pareto improvement, is the outcome necessarily pareto efficient? if a policy change causes a pareto
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!