Answer:
C. stock's alpha is -0.75% SDA Corp.
Explanation:
In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below
Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
For computing the price of the stock, first we have to compute the Expected rate of return which is shown below:
= 8% + 1.25 × (15% - 8%)
= 8% + 1.25 × 7%
= 8% + 8.75%
= 16.75%
Now the price would be
= Return on common stock - expected rate of return
= 16% - 16.75%
= -0.75%
Answer:
The correct answer is letter "B": The price will not increase but firms will increase the quantity supplied to promote the social interest.
Explanation:
Perfectly competitive markets are characterized by having companies offering an undifferentiated product, being price takers because firms posses a small market share which does not allow them to have a major influence in the price, and by free entry and exit of competitors.
Then, <em>if there is a shortage of clean drinking water in a local market that is perfectly competitive, the shortage would not last much since new producers would enter the market to process water so it can be offered purified. As drinking water is a basic good, the number of organizations entering the market is likely to be substantial.</em>
The payback period for the investment is 4 years.
<h3>What is the payback period?</h3>
The payback period is a capital budgeting method used to determine the profitability of an investment. It determines the number of years it would take to recover the amount invested in a project from its cumulative cash flows.
payback period = amount invested / cash inflow
$100,000 / $25,000 = 4 years
To learn more about the payback period, please check: brainly.com/question/26068051
Answer:
The amount should the bank report = $ 21725
Explanation:
Entries:
3.Dr accounts payable 23375
Cr Bank 23375
4. Dr Bank 7500
Cr Account receivable 7500
5. Dr Bank 900
Cr Accounts payable 900
(Error in check)
6. Dr Bank charges 45
Cr Bank 45.
(To record bank charges)
Creative Design co
Bank Reconciliation statement
$
Balance as per bank statement as Aug -20Y6 = 37600
<u>Adjustment:</u>
Add: Deposit in transit = 7500
Less: Outstanding checks = (<u>23375</u>)
Adjusted balance <u>21725</u>.
Balance as per Cash book = 20870
Less : Bank charges = (45)
Add: Error in check = <u>900</u>
Adjusted Balance <u>21725</u>
