1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Ivahew [28]
3 years ago
8

NewLinePhone Corp. is very risky, with a beta equal to 2.8 and a standard deviation of returns of 32%. The risk-free rate of ret

urn is 3% and the return on the market is 11%. NewLinePhone's marginal tax rate is 35%. Use the capital asset pricing model to estimate NewLinePhone's cost of retained earnings. 19.7% 23.9% 22.1% 25.4%
Business
1 answer:
PtichkaEL [24]3 years ago
8 0

Answer:

Risk-free rate (Rf) = 3%

Market return (Rm) = 11%

Beta (β) = 2.8

Ke = Rf +β(Rm - Rf)

Ke = 3 + 2.8(11 - 3)

Ke = 3 + 2.8(8)

Ke = 3 +  22.4

Ke = 25.4%

Explanation:

Cost of retained earnings is a function of risk-free rate plus beta multiplied by risk-premium. Risk premium is the difference between market return and risk-free rate,

You might be interested in
On April 1, Townsley Company sold merchandise with a selling price of $10,000 on account to Trout Company, with terms 3/10, n/30
mamaluj [8]

Answer and Explanation:

The journal entry is shown below:

Cash $8,730

Sales Discount ($9,000 × 3%) $270

       To Accounts receivable $9,000 ($10,000 - $1,000)

Here cash and sales discount is debited as it increased the assets and discount while on the other hand the account receivable should be credited as it reduced the assets  

3 0
2 years ago
On a pay stub, what is the difference between "Net Pay" and YTD Net Pay"?
Len [333]
Net pay is how much you made in a year after taxes YTD Net pay is how much you've made from January to the last day of the pay period before taxes
4 0
3 years ago
One method of managing stress is finding a way to reduce the hindrance stressors encountered on the job. In your group, describe
horrorfan [7]

Explanation:

Stress in the work environment can occur due to several factors, such as excessive pressure, long working hours, conflicts with colleagues and superiors, inadequate salary, insecurity, etc.

It is a factor considered the evil of the century, due to the high competitiveness in the market and faster and faster economic changes, which ends up increasing the company's expectation regarding the employee.

It is important for organizations to adopt a posture that focuses on the needs of employees, so that they are able to measure the level of job satisfaction and implement measures that reduce stress factors in the workplace.

It is also important that the worker seeks to manage his stress through small attitudes, such as establishing a list of tasks, managing his time, seeking to have a better relationship with co-workers, avoiding procrastination, etc.

5 0
3 years ago
Stoneheart Group is expected to pay a dividend of $3.11 next year. The company's dividend growth rate is expected to be 4.2 perc
lukranit [14]

Answer:

$43.19

Explanation:

Use dividend discount model(DDM) to solve this question; specifically constant dividend growth model.

P0 = D1/(r-g)

P0 = Current price

D1 = Next year's dividend = $3.11

r = investors' required return = 11.4% or 0.114 as a decimal

g = dividend growth rate = 4.2% or 0.042 as a decimal

P0 = 3.11/(0.114 - 0.042)

P0 = $43.19

Therefore, this stock price is $43.19

8 0
3 years ago
When establishing criteria to measure the success of a customer-oriented business, managers should:?
gavmur [86]
<span>Managers should conduct a 360 evaluation of staff performance. This includes gathering feedback from suppliers, customers, and other employees. Customer surveys, with an incentive, are an effective way to measure success and gather target feedback. A key performance indicator for this type of business is customer retention.</span>
7 0
3 years ago
Other questions:
  • Some federal grants, such as categorical grants, ____________, while others, such as block grants, ____________.
    7·1 answer
  • What is a mortgage?
    7·1 answer
  • Sunland Company uses the percentage-of-receivables basis to record bad debt expense and concludes that 3% of accounts receivable
    11·1 answer
  • Tom Klem is the controller of Watson Manufacturing, Inc. He estimates that the company’s breakeven point in sales dollars is $2
    5·1 answer
  • Assume the spot rate of the British pound is $1.73. The expected spot rate 1 year from now is assumed to be $1.66. What percenta
    9·1 answer
  • Dynamo Corporation manufactures toasters. Each toaster comes with a 5-year assurance-type warranty. The toasters sell for $60 ea
    14·1 answer
  • The ​short-run effect of consumers becoming more pessimistic will be for the
    9·1 answer
  • If you would like to start a company with decentralized decision making regarding day-to-day operations, but a central body of m
    6·1 answer
  • If adult workers and teenagers are complements, the elimination of the minimum wage for teenage workers would cause the demand f
    5·1 answer
  • Assume that Thomas can afford to buy as many candy bars and ice cream cones as he wants. He would continue to consume both candy
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!