Answer:
the cost of equity capital as per CAPM is 14.71%
Explanation:
The computation of the cost of equity capital as per CAPM is shown below:
As we know that
= Risk free rate of return + beta × (market rate of return - risk free rate of return)
= 5.7% + 1.7 × (11% - 5.7%)
= 5.7%+ 1.7 × 5.3%
= 5.7% + 9.01%
= 14.71%
hence, the cost of equity capital as per CAPM is 14.71%
The same is relevant
Answer:
$24,000
Explanation:
Cash from credit sales is collected with passage of time. Some amount is collected with the sale and some after the sale period. The cash collection for the current month may include the collection against the prior periods sales.
Cash Collection Schedule is prepared in an MS Excel File which is attached with this answer, Please find it.
Answer:
Degree of Financial Leverage = 0.64
Explanation:
Degree of Financial leverage refers to the proportion of debt in the capital structure of a company. It also signifies earnings for shareholders i.e per share earnings of shareholders (EPS) with respect to operating income earned by a company.
In the given case, eps before = $1.25
eps afterwards = $1.37
Degree of financial leverage is expressed as:
Wherein,
EPS = Earnings per share
EBIT = Earnings before interest and taxes
Percentage change in EPS = 
= 9.6%
Percentage change in EBIT = 15%
Hence Degree of Financial Leverage = 
= 0.64
Answer:
$85,260.
Explanation:
The Pound industries customer service department incurs $203,000 when 7,000 calls were made. The calls allocated to wholesale operations are 2,940 calls. To identify cost per call, we divide total cost by number of calls initiated.
Cost per call = $203,000 / 7000 calls
Cost per call = $29.
Wholesales operations cost = No. of calls for wholesale operation / Cost per call.
Wholesale operations cost = 2,940 calls * $29 / call
Wholesale operation cost allocated amount = $85,260.
