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Gnoma [55]
3 years ago
8

Suppose two factors are identified for the U.S. economy: the growth rate of industrial production, IP, and the inflation rate, I

R. IP is expected to be 6% and IR 7%. A stock with a beta of 1 on IP and 0.7 on IT currently is expected to provide a rate of return of 15%. If industrial production actually grows by 7%, while the inflation rate turns out to be 9%, what is your best guess for the rate of return on the stock?
Business
1 answer:
lawyer [7]3 years ago
7 0

Answer:

The new rate of return is 15.4%

Explanation:

The revised estimate on the rate of return on

the stock would be:

• Before

• 14% = α +[4%*1] + [6%*.4]

α = 7.6%

• With the changes:

• 7.6% + [5%*1] + [7%*.4]

The new rate of return is 15.4%

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Helps other people see things better
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1 year ago
g you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product
nordsb [41]

Answer:

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5 0
2 years ago
Segmented Income Statement Gorman Nurseries Inc. grows poinsettias and fruit trees in a green house/nursery operation. The follo
scoray [572]

Answer

A= Net operating loss = (924800)

B= Net operating profit = $9000

Explanation:                                                        A                               B  

                                                                    (Poinsettia)                 (Fruit tree)              

                                                                                   $                               $

Sales                                                                  =970000     ;           = 3100000

less: Variable cost of goods sold                    = (<u>460000</u>)  ;          =(<u>1630000</u>)

Gross contribution margin                                 510000     ;              1470000

Less: <u>Selling expense (4% o sales)</u>

    A (970000*4%)

   B(310000 *4%)                                               ( <u>38800</u>)      ;            ( <u>124000</u>)

 Contribution margin                                         471200     ;             1346000

Less: Fixed overheads                                    <u> (800000</u>)    ;           <u> (800000)</u>

                                                                         (328800)     ;            546000

less: Fixed Selling & admin expense             <u>(146000)</u>      ;           <u>  (87000)  </u>  

                                                                         (474800)     ;           (459000)

Less: Common selling and admin expense (<u>450000) </u>    ;            (<u>450000)</u>

Net operating income /( loss)                        (924800)     ;             9000                                                      

5 0
3 years ago
Boone Company purchased a piece of machinery by paying $18,000 cash. In addition to the purchase price, the company incurred $80
Mkey [24]

Answer:

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Explanation:

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In addition to the purchase price, the company incurred $800 freight charges.

Estimated useful life of the machine is 5 years and will require $600 for insurance over that period.

So insurance money for a year = $ (\frac{600}{5} ) = $120.

Boone Company would record the cost of the machine at  $ ( 18000+ 800+ 120) = $ 18920.

4 0
3 years ago
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blagie [28]
Hello,

Here is your answer:

I think the proper answer to this question will be option A "select a site". That's just because when planing a convention you have to find a place to hold it, form the committee, write the program, and then you have to write invites.

Your answer is A!

If you need anymore help just ask me!
7 0
2 years ago
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