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
77julia77 [94]
3 years ago
14

The stock in Bowie Enterprises has a beta of .87. The expected return on the market is 11.70 percent and the risk-free rate is 2

.89 percent. What is the required return on the company's stock
Business
1 answer:
Tems11 [23]3 years ago
4 0

Answer:

10.55%

Explanation:

The stock in Bowie's enterprise has a beta of 0.87

The expected return on the market is 11.70%

The risk free rate is 2.89%

Therefore, the required return on the company stock can be calculated as follows

= 2.89%+0.87(11.70%-2.89%)

= 2.89%+10.179%-2.5143%

= 2.89%+7.6647%

= 10.55%

Hence the required return on the company's stock is 10.55%

You might be interested in
Describe the parliamentary meeting procedure and its purpose.
Sati [7]

Answer: Only one issue is discussed at a time

Members have equal and basic rights (vote, oppose and heard)

Minority rights are protected

Explanation:

The parliamentary meeting procedure is as follows;

- Only one issue is discussed at a time

- Members have equal and basic rights (vote, oppose and heard)

- Minority rights are protected

- The chairman authorizes anyone to speak

- The chairperson is impartial.

- Votes decides decisions

- Every member on the floor can contribute

The purpose;

They are rules to ensure businesses are operated in the right order

6 0
3 years ago
Suppose your company needs $14 million to build a new assembly line. your target debt-equity ratio is 0.84. the flotation cost f
Leviafan [203]

Suppose your company needs $14 million to build a new assembly line. your target debt-equity ratio is 0.84. the flotation cost for new equity is 9.5 percent, but the floatation cost for debt is only 2.5 percent. The amount required to build a new assembly line = is $ 14 million.

Equity represents the price that could be lower back to an agency's shareholders if all of the property has been liquidated and all of the business enterprise's debts were paid off. We also can consider equity as a diploma of residual possession in a company or asset after subtracting all debts related to that asset.

Equity is the possession of any asset after any liabilities associated with the asset are cleared. for example, in case you very own a vehicle well worth $25,000, but you owe $10,000 on that car, the car represents $15,000 fairness. it is the price or interest of the maximum junior magnificence of investors in assets.

In conclusion, stocks are referred to as equities because they constitute possession in organizations. They permit buyers advantage from boom but also have a chance while enterprise conditions weaken. In the subsequent time, we'll explore the variations between shares and bonds.

Debt equity ratio (debt/equity) = 0.84/1

Therefore total assets = debt + equity = 0.84 + 1 = 1.84

Flotation Cost Percentage formula = Weight of debt x Floataion Cost of debt + Weight of equity x Floataion Cost of equity

= (0.84 / 1.84) 2.5% + (1/1.84)9.5%

= 1.1413% + 5.1630%

= 6.3043%

Amount to be raised to purchase building = Cost of building / ( 1 - Total Floatation Cost Percentage)

= 14/(1-6.3043%)

= 14/0.9370

= 14.94 million

Learn  more about equity here brainly.com/question/26507171

#SPJ4

3 0
1 year ago
One of the main responsibilities employers have under OSHA is to: A. Conduct energy audits B. Notify OSHA of any workplace injur
jeka94
<span>OSHA is responsible to help employers provide training that is required under OSHA's standards. The employers responsibilities include providing a workplace that is free from hazards and complies with the standards set by OSHA/</span>
6 0
2 years ago
Determine if the people in the example have benefited (i.e., are winners) or have been harmed (i.e., are losers) by unexpected i
nevsk [136]

Answer:

Winners

  • 3rd National, a bank that loaned many people money for home purchases.

Losers

  • Karen, a retired school teacher that relies upon her fixed pension to pay for her expenses.
  • Herb, who keeps his savings in an old coffee can.
  • Joy, who has borrowed $40,000 to pay her college education.
  • The US federal government which had almost $15 trillion in debt in 2011.

Explanation:

When unexpected inflation occurs, the usual plan to by Monetary Institutions of a country is raising the interest rates.

By doing that, they want to stop it or slowly decelerate it.

So that it becomes more expensive to take a loan, the idea is to reduce consumption.

In Economics, it's a bad scenario after all. Few winners. Many losers.

So, let's examine them

Winners

  • 3rd National, a bank that loaned many people money for home purchases.

At first, The 3rd National is going to be winning since the value of the debt will rise, depending on the type of contract and an increase in the interest rate will demand corrections on the monthly payments. But on the other hand, the number of default clients and overdue installments will raise for sure.

Losers

  • Karen, a retired school teacher that relies upon her fixed pension to pay for her expenses.

Inflation reduces the real buying value of her checks. And her pension can't grow otherwise this will feed the inflation too.

  • Herb, who keeps his savings in an old coffee can.

Since his money is not invested then He's not having any earning that might give him some compensation. So his money is even more devalued.

  • Joy, who has borrowed $40,000 to pay her college education.

Depending on the contract Joy might be sleepless. Either her monthly payments will become more expensive or She may experience difficulties because of the weekly growing prices.

  • The US federal government had almost $15 trillion in debt in 2011.

Certainly, the president and his secretary will have to address the fact that due to inflation and the chosen medicine make the nation's debt up to the sky. They must renegotiate the payment deadlines.

7 0
3 years ago
6. Choose a good you are familiar with, and analyze its economic utility, using the questions below. NOTE: Choose a good for thi
xxTIMURxx [149]

Answer:Rational expressions are fractions that have a polynomial in the numerator, denominator, or both. ... There are no numbers that can do this, so we say “division by zero is undefined”. ... Find any values for x that would make the denominator equal to 0 by setting the ... Answer. The domain is all real numbers except −9 and 1.

Explanation:

6 0
2 years ago
Other questions:
  • Cyberhost Corporation's sales were $225 million last year. If sales grow at 6% per year, how large (in millions) will they be 5
    9·1 answer
  • __________ is not a technology company but used technology to revamp the business process of renting movies.
    5·1 answer
  • Which of the following is true of accrual basis accounting and cash basis​ accounting? A. Cash basis accounting records all tran
    7·2 answers
  • . What happens if you don't pay your insurance premium for your car?
    12·1 answer
  • Omega Enterprises budgeted the following sales in units:​
    5·1 answer
  • How is a loan obtained through a pawnshop typically paid off?
    9·1 answer
  • Fitness Fanatics is a regional chain of health clubs. The managers of the clubs, who have authority to make investments as neede
    9·1 answer
  • Which of these identifies the three components of Gross Domestic Product?
    5·1 answer
  • "What are the results of a contractionary monetary policy, which intends to slow down the economy, and what are not? You are cur
    9·2 answers
  • Fuzzy Tail Industries produces wooden picnic tables for fuzzy creatures (hamster and squirrel size are its most popular products
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!