Answer:
6.20000%
Explanation:
The computation of the unlevered cost of capital is shown below;
Asset beta is
= (Debt × Debt beta + Equity × Equity beta) ÷ (Debt + Equity)
= (75 × 0.20 + 300 × 0.75) ÷ (75 + 300)
= 0.6400000
Now
Unlevered cost of capital is
= risk free rate + asset beta × market risk premium
= 3% + 0.6400000 × 5%
= 6.20000%
<span>If you borrow money from a bank, you are the ____________. </span>
<span>C</span>
Answer:
The annual cost to have this annuity is 16.66%
Explanation:
Solution
Given that
You pay an annuity of = $15,000
Annuity pays =$2500 per year
n =10 years
The rate of return = 5%
The estimated inflation is -6% average
Now
We find the annual cost to own this annuity
Thus
We find the real or actual yield given as:
I =PNR
$2500 = $15,000 * 1 * r
So,
R=$2500/$15,000
=0.1666 or 16.66 %
Answer:
C. Choose the price where the quantity demanded equals the quantity supplied because that is the equilibrium condition.
Explanation:
The equilibrium price is the most ideal because at this price the consume is willing to buy, if price goes above this the consumer may look for an alternative and this will further increase surplus.
Also when there is surplus the suppliers will find a way to sell competitively at the equilibrium price.