Answer:
Expected market return = 9.8%
Explanation:
The expected return on the market can be worked out using the Capital Asset Pricing Model.
<em>The capital asset pricing model is a risk-based model. Here, the return on equity is dependent on the level of reaction of the the equity to changes in the return on a market portfolio. These changes are captured as systematic risk. The magnitude by which a stock is affected by systematic risk is measured by beta.
</em>
Under CAPM, Ke= Rf + β(Rm-Rf)
Rf-risk-free rate (treasury bill rate)- 4.4%
β= Beta - 1.20
Rm= Return on market.- ?
Applying this model, we have
11%= 4.4%+ (R-4.4%)×1.20
0.11-0.044= 1.20×(R-0.04)
0.07
= 1.20R-0.048
Collect like terms
0.07+0.048 = 1.2R
Divide both sides by 1.20
R= (0.07+0.048)/1.20
R=9.83%
Expected market return = 9.8%
Direct financing involves the financial market and indirect financing involves intermediaries. In the financial market, companies put their shares for sale and investors buy them. This is a direct financing mechanism for companies, which raise funds by sharing their own capital in traded shares.
On the contrary, if a company seeks bank financing, there will necessarily be intermediation by third parties, such as banks. In the middle market, economic agents deposit their money with the bank, and the bank uses it to lend to companies. This is intermediating a financing. Both types of financing are widely used, all will depend on the structure and purpose of each company in the search for financing.
Answer:
b
Explanation:
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Answer:
$84,500
Explanation:
Data provided as per the question
Net income = $85,000
Depreciation expenses = $1,500
Accounts receivables = $3,000
Increase in accounts payable = $1,000
The computation of amount of cash provided by operating activities is given below:-
Amount of cash provided by operating activities = Net Income + Depreciation expenses - Accounts receivables + Increase in accounts payable
= $85,000 + $1,500 - $3,000 + $1,000
= $84,500
Therefore, for computing the Amount of cash provided by operating activities we simply applied the above formula.
Answer: <u><em>C. Using predetermined totals to control posting routines.</em></u>
Explanation: A regulation total if developed for the agreement to be posted, then it should be set side by side with total of items posted to personal accounts. Therefore, The most adequate way to avert this kind of error is by applying predetermined totals to control stating the daily cycle.
<u><em>Therefore, the correct option in this case is (c)</em></u>
