Answer:
Alpha's cost of retained earnings is 16%
Explanation:
Cost of retained earnings is approximated by the returns that investors expect from their equity in a company.
Capital asset pricing model describes the relationship that exists between expected returns on investment and the risk of the investment.
Returns on investment is equal to the sum of risk free returns and risk premium.
Returns expected= Risk free rate+ (Beta coefficient * Market risk premium)
Returns expected= 10+ (1.2* 5)
Returns expected= 16%
Find below an illustration of the Capital Asset Pricing Model.
Answer:
The retirement fund will last for 33 years and 7 months
Explanation:
We need to solve for time in an ordinary annuity
C $15,000.00
rate 0.004 (4.8% divide by 12 month)
PV $3,000,000
time n
we clear for n as much as we can and solve
now we use logarithmic properties to solve for n:
-403.16
this will be a value in months so we divide by 12 to get it annually
403/12 = 33,5833
we convert the residual to months:
0.5833 x 12 = 6.996 = 7 months