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Temka [501]
3 years ago
5

Hastings Entertainment has a beta of 0.65. If the market return is expected to be 11 percent and the risk-free rate is 4 percent

, what is Hastings' required return
Business
1 answer:
maria [59]3 years ago
4 0

Answer:

The answer is 8.55 percent

Explanation:

This is Capital Assets Pricing Model(CAPM) shows the relationship between undiversified risk(systemai risk) and the expected rate of return for shareholders. It is used to determine the cost of equity. This model is widely used in finance.

The formula is: Risk free rate of return + beta(market return - risk free rate of return ).

Note that risk free rate of return - market return is known as risk premium i.e the compensation for taking risk.

Risk free rate of return - 4 percent

market return - 11 percent

Beta - 0.65

4 + 0.65(11 - 4)

4 + 0.65(7)

4 + 4.55

=8.55 percent

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In New Guinea, tribes that had been isolated for centuries were found that _______________.
amid [387]

Answer:

a. had a large number of sophisticated language systems

Explanation:

  • The indigenous tribes of the New guinea are Melanesian and Austronesian people and speak Papuans and they are the rarest of the newly evolves tribal population.
  • As they have migrated and have a larger sense of the linguistics diversity as the lands were separated from other landmasses till date there are more than 312 tribes on the western side  of the inland.
3 0
4 years ago
An investor in Treasury securities expects inflation to be 1.6% in Year 1, 3.05% in Year 2, and 3.85% each year thereafter. Assu
mixer [17]

Answer:

The difference between two securities is 0.89%.

Explanation:

Inflation premium for the next three and five years:

Inflation premium (3) = (1.6% + 3.05% + 3.85%) ÷ 3

                                  = 2.83%

Inflation premium (5) = (1.6% + 3.05% + 3.85% + 3.85% + 3.85%) ÷ 5

                                  = 3.24%

Real risk-free rate = 2.35%

Since default premium and liquidity premium are zero on treasury bonds, we can now solve for the maturity risk premium:

Three-year Treasury securities = Real risk-free rate + Inflation premium (3) + MRP(3)

6.80% = 2.35% + 2.83% + MRP(3)

MRP (3) = 1.62%

Similarly,

5-year Treasury securities = Real risk-free rate + Inflation premium (5) + MRP(5)

8.10% = 2.35% + 3.24% + MRP(3)

MRP (5) = 2.51%

Thus,

MRP5 - MRP3 = 2.51% - 1.62%

                         = 0.89%

Therefore, the difference between two securities is 0.89%.

4 0
3 years ago
Assets are debts or money you owe to others. answer true false
ollegr [7]
False.
Asset are things you own, Debts are things you owe.
Hope that Helps :3
8 0
3 years ago
Htc started as an original equipment manufacturing firm (oem) for brand-name mobile device companies. later, it started offering
choli [55]

Answer:

Forward vertical integration

Explanation:

Forward vertical integration is a strategy that allows companies to get more control of their business value chain and be more competitive by including the distribution of the products to be able to reach the customers directly. According to this, the answer is that the strategic move of HTC is known as forward vertical integration as HTC acquired one & co. to be able to offer a line of smartphones which was a move to distribute the cellphones they manufactured directly to the customers.

6 0
3 years ago
Omar and Vincenzo sell magazine subscriptions by telephone. Omar is paid $1.00 for every 5 calls he makes, while Vincenzo is pai
ratelena [41]

Answer:

Omar is paid on a <u>FIXED RATIO</u> schedule whereas Vincenzo is paid on a <u>VARIABLE RATIO</u> schedule.

Explanation:

When someone gets paid on a fixed ratio schedule, they are getting paid for every determined amount of time worked or tasks performed, e.g. you get paid $23 per hour, regardless of how much work you do.

Generally salespeople are paid using a variable ratio schedule because most (or all) of their salary is based on sales commissions. That means that the more they sell, the more money they earn, e.g. a salesperson is paid 3% of total sales.

5 0
3 years ago
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