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3 years ago

What is the expected return on this stock given the following information?

Business

1 answer:

Charra [1.4K]3 years ago

4 0

Answer:

The expected return on this stock is:

C. -6.80%.

Explanation:

a) Data and Calculations:

State of the Economy Probability E(R) Weighted Value

Boom 0.40 16% 0.064

Recession 0.60 -22% -0.132

Total expected returns -0.068

= -6.8%

Let us assume that this stock is Stock A. Therefore, Stock A's expected return is given by adding the weighted returns of the two economic states of Boom and Recession. The result shows that the returns will be negative (-6.8%). This implies that instead of appreciating in value, the stock will actually depreciate by 6.8%.

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3 years ago

Slack Inc. borrowed $400,000 on April 1. The note requires interest at 12% and principal to be paid in one year. How much intere

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Answer:

D.$36,000

Explanation:

Calculation for How much interest is recognized for the period from April 1 to December 31

First step is to find the 12% of the amount that was borrowed which is $400,000

$400,000×12%

=$48,000

Now let calculate for the amount of interest that is recognized from April 1 to December 31

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Hence,

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3 years ago

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2 years ago

Data for Hermann Corporation are shown below:

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The cost benefit analysis will be suitable here for short term decision making.

Cost Benefit Net

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Increase in Total Contribution (W-2) $2700 $2700

Net Decrease in Operating Income ($5000) $2700 ($2300)

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Requirement (b)

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Requirement 2

Again here we will appraise the suitability of the option by using cost benefit analysis.

Cost Benefit Net

Increase in T.Variable Cost (W-3) ($4400) ($4400)

Increase in Total Contribution (W-4) $1000 $1000

Net Decrease in Operating Income ($4400) $1000 ($3400)

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Increase in Total Variable cost = $2 net increase in variable cost per unit * total units after opting to higher quality components

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