Answer:
The company's cost of equity capital is 0.056
Explanation:
cost of equity capital
= risk free rate + beta*(expected return on market - risk free rate)
= 0.01 + 0.92*(0.06 - 0.01)
= 0.056
Therefore, The company's cost of equity capital is 0.056
Answer:
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Explanation:
People was the greatest export
A security with a beta of 1 has a return last year of 8% when the market has a return of 12%.
Answer: Option A
<u>Explanation:</u>
In a market of the capitals, the return that a person will get from the security will depend upon the risk that has been associated with that security. The CAPM says that the return of the security that a person will get depend upon the beta of the security. Here beta is the measure with which we can measure the risk of the security. It is an absolutely correct measure of the security risk.
Answer:
d. 12.5 times.
Explanation:
The computation of the accounts receivable turnover ratio is shown below:
Account receivable turnover ratio = Net credit sales ÷ Average accounts receivable
where,
Net credit sales is $8,500,000
And, the Average accounts receivable would be
= (Accounts receivable, beginning of year + Accounts receivable, end of year) ÷ 2
= ($600,000 + $760,000) ÷ 2
= $680,000
So, the accounts receivable turnover ratio would be
= $8,500,000 ÷ $680,000
= 12.5 times
We simply applied the above formula
