Answer:
Cost of equity = 11.7%
Explanation:
<em>The capital asset pricing model is a risk-based model. Here, the return on equity is dependent on the level of reaction of the the equity to changes in the return on a market portfolio. These changes are captured as systematic risk. The magnitude by which a stock is affected by systematic risk is measured by beta.</em>
Under CAPM, Ke= Rf + β(Rm-Rf)
Rf-risk-free rate,-4%, β= Beta-1.10, (Rm-Rf) = 7% ,Ke = cost of equity
Using this model,
Ke=4% + 1.10×7%
= 11.7 %
Cost of equity = 11.7%
Answer:
$40,800
Explanation:
The computation of the net income is shown below:-
With regard to non-controlling interest, Lowell Corp. and the non-controlling interest divided Boston net profits proportionately to their ownership interests.
Non controlling interest share of consolidated net income = Boston net income × Remaining percentage
= $204,000 × (100% - 80%)
= $204,000 × 20%
= $40,800
Therefore for computing the Non controlling interest share of consolidated net income we simply multiply the Boston net income with remaining percentage.
Answer:
The income elasticity of demand for generic potato chips=-4.00
Explanation:
Elasticity of demand can be defined as a measure of how responsive the demand for a certain good is when the price of that good or service changes. The elasticity of demand is usually negative. A negative elasticity of demand implies that the demand of a good or service reduces with an increase in price. The elasticity of demand can be measured using different methods. The mid-point method will be used in this case. The mid-point method of calculating elasticity of demand is as shown;
E=%Q/%P
where;
E=elasticity of demand
%Q=percentage change in quantity demanded
%P=percentage change in the price
And;
%Q=[(Final quantity-Initial quantity)/{(Final quantity+Initial quantity)÷2}]×100
Final quantity=0
Initial quantity=2
replacing;
[(0-2)/{(0+2)÷2}]×100=(-2/1)×100=-200%
%P=[(Final price-Initial price)/{(Final price+initial price)÷2}]×100
%P=[(15-9)/{(15+9)÷2}]×100=(6/12)×100=50%
E=%Q/%P
replace for %Q and %P
E=-200%/50%
E=-4
The income elasticity of demand for generic potato chips=-4.00
Answer:
True
Explanation:
The journal entries are the recording of the transactions in which the one account is debited and another account is credited along with the description and the date.
If we take the example.
Rent is paid for cash for $10,000
So, the journal entry would be
Rent expense A/c Dr $10,000
To Cash A/c $10,000
(Being rent is paid for cash is recorded)
So, the given statement is true
