Answer:
The best estimate of the company’s cost of equity is 11.99%.
Explanation:
CAPM based required return = 5% + 1.1*7%
= 12.7%
Dividend model required return
35 = (1.40*1.07)/(r - 0.07)
r - 0.07 = 0.0428
r = 11.28%
The best estimate of the company’s cost of equity is the mean of two = (12.7% + 11.28%)/2
= 11.99%
Therefore, The best estimate of the company’s cost of equity is 11.99%.
I can barely see is that supposed to say gross
Answer:
Combined Beta = 1
Combined return = 10%
Explanation:
given data
stock portfolio = $50,000
beta = 1.2
expected return = 10.8%
beta = 0.8
expected return = 9.2%
standard deviation = 25%
to find out
combination
solution
we get here first Combined Beta that is express as
Combined Beta = 1.2 × 50% + 0.8 × 50%
Combined Beta = 1
and
Combined return will be here
Combined return = 10.8 × 50% + 9.2 × 50%
Combined return = 10%
Answer:
Total cash collection May= $60,000
Explanation:
Giving the following information:
Cash collection:
30% are collected in the month of sale
60% are collected in the first month after sale
10% are collected in the second month after sale.
Sales:
April= $60,000
May= $80,000
<u>We need to calculate the cash collection for May:</u>
Cash collection:
Sales in cash May= (80,000*0.3)= 24,000
Sales in account from April= (60,000*0.6)= 36,000
Total cash collection May= $60,000
Answer:
The answer would be A
Explanation:
Qualified plans provide two important tax benefits that are not available in other types of investments.
Tax rates will be higher in future years, but the benefits of the tax deferred savings plan will overcome higher tax rates over time.
