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Mandarinka [93]
3 years ago
11

The common stock of United Industries has a beta of 1.34 and an expected return of 14.29 percent. The risk-free rate of return i

s 3.7 percent. What is the expected market risk premium?
Business
1 answer:
n200080 [17]3 years ago
8 0

Answer:

7.90%

Explanation:

For this question, we use the Capital Asset Pricing Model formula that is presented below:

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

where,

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

So, the expected market risk premium is

14.29% = 3.7% + 1.34 × expected market risk premium

10.59% = 1.34 × expected market risk premium

So, the expected market risk premium is 7.90%

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Osage Corporation issued 2,000 shares of stock. Prepare the entry for the issuance under the following assumptions. (Credit acco
skelet666 [1.2K]

Answer:

A. Dr Cash 52,000

Cr Common Stock 10,000

Cr Paid-in Capital in Excess of Par-Common Stock 42,000

B. Dr Cash 52,000

Cr Common Stock 10,000

Cr Paid-in Capital in Excess of Stated Value-Common Stock 42,000

C. Dr Cash 52,000

Cr Common Stock 52,000

D. Dr Organization Expense 52,000

Cr Common Stock10,000

Cr Paid-in Capital in Excess of Stated Value-Common Stock 42,000

E. Dr Land 52,000

Cr Common Stock 10,000

Cr Paid-in Capital in Excess of Stated Value-Common Stock 42,000

Explanation:

Preparation of the entry for the issuance

A. Dr Cash 52,000

Cr Common Stock 10,000

(2,000 x 5 )

Cr Paid-in Capital in Excess of Par-Common Stock 42,000

(52,000 – 10,000)

B. Dr Cash 52,000

Cr Common Stock 10,000

(2,000*5)

Cr Paid-in Capital in Excess of Stated Value-Common Stock 42,000

(52,000 – 10,000)

C. Dr Cash 52,000

Cr Common Stock 52,000

D. Dr Organization Expense 52,000

Cr Common Stock10,000

(2,000*5)

Cr Paid-in Capital in Excess of Stated Value-Common Stock 42,000

(52,000-10,000)

E. Dr Land 52,000

Cr Common Stock 10,000

(2,000*5)

Cr Paid-in Capital in Excess of Stated Value-Common Stock 42,000

(52,000-10,000)

7 0
3 years ago
Why the economy sees business cycle fluctuations rather than slow, smooth growth is a central issue of ______.
____ [38]

The financial system sees commercial enterprise cycle fluctuations in preference to slow, easy boom is a crucial trouble of Economic shocks.

The required details for Economic shocks in given paragraph

An financial surprise refers to any extrude to fundamental macroeconomic variables or relationships that has a considerable impact on macroeconomic effects and measures of financial performance, which includes unemployment, consumption, and inflation. Shocks are regularly unpredictable and are generally the end result of occasions concept to be past the scope of regular financial transactions. Economic shocks have full-size and lasting outcomes at the financial system, and, in accordance to actual commercial enterprise cycle theory (RBC), are concept to be the foundation purpose of recessions and financial cycles. Economic shocks are random, unpredictable occasions which have a full-size effect at the financial system and are due to matters outdoor the scope of financial models.

Economic shocks may be labeled with the aid of using the financial area that they originate from or with the aid of using whether or not they mainly affect both deliver or demand. Because markets are connected, the outcomes of shocks can pass via the financial system to many markets and feature a main macroeconomic effect, for higher or worse.

To know about Economic shocks click here

brainly.com/question/29704208

#SPJ4

6 0
1 year ago
It is April 2018 and Mark is a novice investor who wants to decide between purchasing shares in EagleCorp or Myna Bird Inc. In f
dybincka [34]

Answer:

EagleCorp is more likely to create value while Myna Bird Inc. is more likely to destroy value.

It is April 2018 and Mark is a novice investor who wants to decide between purchasing shares in EagleCorp or Myna Bird Inc. In the fiscal year 2017, EagleCorp's return on invested capital (ROIC) was 15 percent, and its cost of capital was 12 percent. During the same period, Myna Bird Inc.'s ROIC was 22 percent and its cost of capital was 25 percent. Here EagleCorp is more likely to create value while Myna Bird Inc. is more likely to destroy value.

6 0
3 years ago
Builtrite has two bond issues outstanding(sold two separate groups of bonds over the years). One issue has a 7 year maturity and
baherus [9]

Answer:

C

Explanation:

Here, we want to select which of the given options in the question is true/correct.

From the question we can observe that the two bonds have required return less than coupon rate. Hence we can conclude that, both are premium bonds. The 7-years bond however. will have closer price to par value.

Bond prices will gradually decrease as we have a decrease in years to maturity. This means that the closer the year to maturity, the lesser the value of the bond price

4 0
3 years ago
I will give you fifty five point if you make Brainliest me but if you don't and it's just a scam I'm going to report you and the
gulaghasi [49]

Answer:

okay lol

Explanation:

answer my newest question and i'll give it to you <3

5 0
3 years ago
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