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
WINSTONCH [101]
2 years ago
6

A stock has a beta of 1.28, the expected return on the market is 12%, and the risk-free rate is 4.5%. Using the CAPM, what is th

e expected return on this stock
Business
1 answer:
MatroZZZ [7]2 years ago
8 0

Answer:

14.10%

Explanation:

The calculation of expected return on this stock is shown below:-

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

= 4.5% + 1.28 × (12% - 4.5%)

= 4.5% + 1.28 × 7.5%

= 4.5% + 9.6%

= 14.10%

The Market rate of return - Risk-free rate of return) is also called as the market risk premium

hence, the expected rate of return is 14.10%

You might be interested in
Omicron Technologies has $50 million in excess cash and no debt. The firm expects to generate additional free cash flows of $40
Sergeu [11.5K]

Answer:

$4 per share

Explanation:

The formula to compute the regular yearly dividends in the future is shown below:

= Free cash flow ÷ outstanding shares

= $40 million ÷ 10 million shares

= $4 per share

It shows a relationship between the free cash flow and the outstanding shares

All other information which is given is not relevant. Hence, ignored it

5 0
3 years ago
The labor force includes rev: 05_30_2018 Multiple Choice employed workers but excludes persons who are officially unemployed. pe
butalik [34]

Answer:

employed workers and persons who are officially unemployed

Explanation:

The labor force is the force that involves the labors who are employed and the unemployed i.e. officially

In an equation, it can be

Labor force = Employed workers + unemployed workers

It is a combination of both the employed and the unemployed workers

hence, the correct option is third

Therefore all the other options are wrong as they do not meet the criteria of the labor force

8 0
3 years ago
Which of the following would cause a leftward shift of the supply curve for computers? A. an increase in the price of printed ci
Margaret [11]

Answer:

The answer is A.

Explanation:

All other things being equal, an increase in the cost of production of a product will decrease the units of the product being reduced and this reduction in supply shifts the supply curve to left while a decrease in the cost of production will increase the units of the product being produced and this shifts the supply curve to the right.

Printed circuit boards is one of the materials used to build computers and since the price has increased, the cost of producing computer also increases and this will make the producers to produce less, shifting the supply curve to the left.

6 0
3 years ago
ABC Company's production budget for October is based on 500 units. Standard unit cost for raw materials is $130 per unit ($10 pe
melisa1 [442]

Answer and Explanation:

The computation is shown below;

a. Raw material price variance is

= (standard price - actual price) × actual quantity

= ($10 - $11) × ($69,300 ÷ $11)

= ($10 - $11) × 6,300

= $6,300 unfavorable

b. The raw material usage variance is

= (Standard quantity - actual quantity) × standard price

= (525 × 13 - 6,300) × $10

= $5,250 favorable

In this way it should be calculated

3 0
2 years ago
Cherokee Manufacturing Company established the following standard price and cost data: Sales price $ 12.00 per unit Variable man
blagie [28]

Answer:

<u>Pro forma income statement in contribution format</u>

Sales ( 2,200 units × $ 12.00)                                        26,400

Less Variable Costs :

Variable manufacturing cost ( 2,200 units × $ 7.20)   (15,840)

Contribution                                                                    10,560

Less Expenses :

Fixed manufacturing cost                                              (3,600)

Fixed selling and administrative cost                            (1,200)

Net Income                                                                      5,760

Explanation:

A flexed budget shows the Budgeted Costs and Revenues at Actual level of production rather than the Budgeted level of production.

<u />

4 0
3 years ago
Other questions:
  • How do you plan to use financial statements in your projected financial statement analysis? Provide rationale for your approach.
    14·1 answer
  • The following information relates to the Magna Company for the upcoming year, based on 402,000 units. Amount Per Unit Sales $ 8,
    9·1 answer
  • Why would you put money in a saving account
    7·2 answers
  • When a certain price control is imposed on this market, the resulting quantity of the good that is actually bought and sold is s
    13·1 answer
  • Katie had a high monthly food bill before she decided to cook at home every day in order to reduce her expenses. She starts to s
    6·1 answer
  • David Harbert recently started a business. During the first few days of operation, Mr. Harbert transferred cash from his persona
    8·1 answer
  • When most consumers and firms reduce spending only because they expect other consumers and firms to reduce spending and a recess
    6·1 answer
  • On January 1, 2018, Race Corp. acquired 80% of the voting common stock of Gallow Inc. During the year, Race sold to Gallow for $
    6·1 answer
  • Calculate the federal government's share of total output in 1993, 2003, and 2013.
    15·1 answer
  • Give me suggestions on how to enhance labor market processes
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!