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loris [4]
3 years ago
13

Calculate the required rate of return for Avy Inc., assuming that the company has a beta of 1.10, while investors expect treasur

y bills to be yielding 3.0%, with a market risk premium is 5.0%.
Business
1 answer:
drek231 [11]3 years ago
3 0

Answer:

8.5%

Explanation:

Avy incorporation has a beta of 1.10

The risk free rate is 3.0%

The market risk premium is 5.0%

Therefore, the required rate of return can be calculated as follows

Required rate of return= Risk-free rate+beta(market Risk premium)

= 3.0% + 1.10(5.0%)

= 3.0%+5.5

= 8.5%

Hence the required rate of return is 8.5%

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3 years ago
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The first step in the decision-making process is A. evaluating the alternatives. B. evaluating the effectiveness of the chosen a
Roman55 [17]

<u>Answer: </u>Option D

<u>Explanation:</u>

Decision making means the important and timely action that needs to be taken. Decision making has six steps involved in the process the first step is to identify the problem or the decision to be made. In the second step the possible alternatives solutions are listed. Third step is to identify the consequences of the alternatives and ways it affects other peoples.

Fourth step is to consider the values before taking the decision. Fifth step is to make decision and take action accordingly. The final and sixth step is to evaluate the decision made.

7 0
3 years ago
The attitudes that Ryan's customers develop after they have purchased his yearly lawn care service will become the basis for det
gladu [14]

Answer:

tangibles

Explanation:

In this situation, Ryan needs to demonstrate the tangibles dimension of service quality. This refers to the physical appearances of the service that he is providing, all of the things that the client can see and touch that will increase their positive outlook on Ryan and his business. In this case being the well-maintained yards, clean equipment, professional-looking employees, etc. These tangible factors will convince the clients to renew their subscription.

3 0
3 years ago
The South Division of Wiig Company reported the following data for the current year. Sales $3,018,000 Variable costs 1,979,808 C
hram777 [196]

Answer:

(a) Compute the return on investment (ROI) for the current year.

Current ROI 8.72%

Explanation:

Sales 3,018,000

- Variable Cost 1,979,808

- fixed cost 594,600

Operating Income 443,592

Operating assets 5,087,200

Return on Investment

\frac{operating \: Income}{Average \: Assets}

ROI = 433,592/5,087,200 = 0.087197 = 8.72%

5 0
3 years ago
The one-year interest rate over the next three years is expected to be 3.00%, 5.00% 8.00%. The liquidity premium for one- to thr
DENIUS [597]

Answer:

6%

Explanation:

An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited or borrowed. The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, the compounding frequency, and the length of time over which it is lent, deposited or borrowed.

Solution

interest rate on 3-year bond

Interest rate = [{(1 + 3%) × (1 + 5%) × (1 + 8%)} ^ (1 / 3) - 1] + 0.75%

Interest rate = [(1.16802 ^ 0.33) - 1] + 0.75%

Interest rate = (1.0525- 1) + 0.75%

Interest rate = 0.0525 + 0.0075%

Interest rate = 0.06 OR 6%

6 0
3 years ago
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