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bezimeni [28]
3 years ago
6

The risk-free rate is 7% and the expected rate of return on the market portfolio is 11%. a. Calculate the required rate of retur

n on a security with a beta of 1.92. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b. If the security is expected to return 15%, is it overpriced or underpriced?
Business
1 answer:
____ [38]3 years ago
3 0

Answer:

Required rate of return= 14.8

If the security is expected to return 15%, it is underpriced.

Explanation:

The required rate of return on the security can be calculated using the CAPM formula which states that

Required rate of return =rf + B(rm  - rf)

where rf= risk free rate

          B= beta of the security

          rm = return on the market

Required rate of return = 0.07 + 1.92(0.11-0.07) = 14.68%

If the security is expected to return 15%, it is underpriced, and is a good investment. Discounting the expected cash-flows from the security at this higher expected return of 15% is going to yield a lower price compared to what the investor is prepared to pay given his required rate of return of 14.68%.

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Sleep master, inc. manufactures bedding sets. the budgeted production is for 57,000 comforters in 2013. each comforter requires
pentagon [3]

Answer:

Total Material cost = $507,000

Explanation:

Material budget shows the total budgeted material cost for a specific period.

               Sleep master, inc.

          Direct Material Budget

            December 31, 2013

Budgeted production units                57,000

<u>yards required per comforter                   × 6</u>

Materials needed for production = 342,000 yards

<u>Add: Ending Material Inventory   =  27,000   yards</u>

Total Material units required       = 369,000 yards

<u>Less: Beginning Materials            = (31,000)  yards</u>

Material used                                = 338,000 yards

<u>Cost per yard                                         × $1.50</u>

Total Material cost                       = $507,000

5 0
3 years ago
If all courses were regular (not honors or AP) 1 credit classes, calculate the student's GPA based on the following grades:
12345 [234]

2.56 is the calculate of the student GPA

7 0
3 years ago
For 2012 Fielder Corporation reported net income of $30,000; net sales $400,000; and average share outstanding 12,000. There wer
jonny [76]

Answer:

$2.50

Explanation:

The Earnings Per Share of a company is determined by using the formula:

EPS= (Net Income of the Company - Dividend to Preferred Shareholders) ÷ Average Outstanding Shares of the Company

Since there is no dividend to preferred shareholders

EPS= Net Income of the Company - ÷ Average Outstanding Shares of the Company

=30000 ÷ 12000

=$2.50

5 0
3 years ago
Which budget or budget type should be used to meet the following​ needs? a. Upper management is planning for the next five years
Simora [160]

Answer:

a. A Strategic budget will be used by the upper management in planning for the next five years.

b. A flexible budget will be used by a store manager who wants to plan for different levels of sales.

c. A Cash budget will be used by an accountant who wants to determine whether the company has sufficient funds to cover expenses.

a. A Master Budget will be used by a CEO who wants to make companywide plans for the next year.

Explanation:

  • Strategic budget, is finnancial planing to achieve the long term goals of the company.
  • flexible budget is used for different level of sales volume.
  • Cash budget usted for forescast the cash balance.
  • Master Budget uses a schedule to present financial statements.

4 0
3 years ago
A resource-based strategy Multiple choice question. focuses on efficient execution of both primary and supporting components of
ki77a [65]

Answer:

can be achieved by exploiting resources that are competitively valuable, rare, and hard to imitate by rivals

Explanation:

A resource-based strategy is a form of the technique used by business managers to efficiently utilized the existing and valuable resources of the firm. These resources would be difficult to come by for the competitors such that it is hard for competitors to replicate. Thereby leading a sustainable or long term competitive advantage to the firm

Hence, in this case, the correct answer is A resource-based strategy "can be achieved by exploiting resources that are competitively valuable, rare, and hard to imitate by rivals."

5 0
3 years ago
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