Answer:
13.61 %
Explanation:
We have these information to answer the question
Risk free rate = 5.25
Beta = 0.88
Future return on market = 14.75
The formula for required rate of return
= Risk free rate + [ Beta * (future return on market - risk free rate)]
= 5.25 + [0.88(14.75-4.62)]
= 5.25 + (12.98-4.62)
= 5.25 + 8.36
= 13.61%
Therefore the firm's required rate of return = 13.61 %
Thank you!
Answer:
$152,600
Explanation:
The computation of the cost of the land is shown below:
Cost of the land = Purchase price + real estate commissions + delinquent property taxes + closing costs + clearing and grading of the land
= $125,000 + $9,500 + $1,800 + $3,500 + $12,800
= $152,600
We considered all the given information
hence, the cost of the land is $152,600
Answer: D. A and B only
Explanation:
In a fix exchange rate, the country can address problem of currency market pressure that threaten yo lower or raise the value of its currency by this under listed measures;
1. if demand falls, then countries must increase demand by buying up the excess supply with domestic currency
2. if demand rises, countries must fill the excess demand for foreign currency by selling their reserves.
Answer:
1. Market Equilibrium, 2. Interest Rate, 3. Rationing, 4. Supply Shock, 5. Excess Supply, 6. Excess Demand, 7. Price Floor
Explanation:
1. The point at which quantity demanded and quantity supplied are equal: <u>Market Equilibrium </u>
2. The financial and opportunity costs consumers pay in searching for a good or service : <u>Interest Rate </u>
3. A system of allocating scarce goods and services by criteria other than price: <u>Rationing </u>
4. A sudden drop in the supply of a good: <u>Supply (decrease - leftward shift) shock </u>
5. Any situation in which quantity supplied exceeds quantity demanded: <u>Excess Supply </u>
6. Any situation in which quantity demanded exceeds quantity supplied: <u>Excess Demand </u>
7. A government-mandated minimum price that must be paid for a good or service: <u>Price Floor (Minimum Support Price)</u>
Answer:
The required rate of return is r = 0.1475 or 14.75%
Explanation:
The required rate of return is the minimum return that investors demand/expect on a stock based on the systematic risk of the stock as given by the beta. The expected or required rate of return on a stock can be calculated using the CAPM equation.
The equation is,
r = rRF + Beta * (rM - rRF)
Where,
- rRF is the risk free rate
- rM is the return on market
r = 0.06 + 1.25 * (0.13 - 0.06)
r = 0.1475 or 14.75%