Given:
<span>General pharmacy’s stock has a beta of 1.8 and an expected return of 14%,
Sicoras corp.’s stock has a beta of 1.5 and an expected return of 16.2%.
Let Rf stand for risk free rate.
Let Rm stand for expected market return.
General Pharmacy: 14% = Rf + 1.8(Rm-Rf)
Sicoras Corp.: 16.2% = Rf + 1.5(Rm-Rf)
0.14 = Rf + 1.8Rm - 1.8Rf
0.14 = Rf - 1.8Rf + 1.8Rm
0.14 = -0.8Rf + 1.8Rm
0.14 + 0.8Rf = 1.8Rm
Rm = 0.14/1.8 + 0.8Rf/1.8
Rm = 0.078 + 0.444Rf
</span><span>0.162 = Rf + 1.5(Rm-Rf)
</span>0.162 = Rf + 1.5[(0.078+0.444Rf) - Rf]
0.162 = Rf + 0.117 + 0.666Rf - 1.5Rf
0.162 - 0.117 = Rf + 0.666Rf - 1.5Rf
0.045 = 0.166Rf
0.045/0.166 = Rf
0.271 = Rf
<span>Rm = 0.078 + 0.444Rf
</span>Rm = 0.078 + 0.444(0.271)
Rm = 0.078 + 0.120
Rm = 0.198
Rf = 27.1% ; Rm = 19.8%
The risk free rate is 27.1% and the expected market return is 19.8%.
To check, simply substitute the value of Rf and Rm in the above equation.
If it is greater than or equal to the price.
hope this helps
It is true that Opportunity costs at a manufacturing company are not part of manufacturing overhead.
<h3>What is
Opportunity costs ?</h3>
Opportunity costs can be described as the term that represent the potential benefits which individual, investor, misses out in the process of choosing one alternative over another.
Because opportunity costs are unseen can be easily overlooked, therefore, in this case, It is true that Opportunity costs at a manufacturing company are not part of manufacturing overhead.
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Robert should use intermittent schedules of reinforcement to keep his employees mentally alert and interested. The procedure of learning through association to increase or decrease voluntary behavior using punishment and reinforcement is known as operant conditioning.
Reinforcement schedules are the rules that govern the timing and frequency of reinforcer delivery in order to increase the likelihood that a target behavior will occur again, strengthen, or continue. A contingency timetable is one that includes reinforcement. While intermittent schedules provide reinforcers.
After some but not all correct replies, intermittent schedules apply reinforcement after each correct response, or none at all. Reinforcers are only used after the target behavior has occurred, so reinforcement is conditional on the desired behavior.
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