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Mariulka [41]
3 years ago
8

A certain stock has a beta of 1.45. If the risk-free rate of return is 5 percent and the market risk premium is 8.5 percent, wha

t is the expected return of the stock
Business
1 answer:
sesenic [268]3 years ago
7 0

Answer:

Expected rate of return is 17.3%

Explanation:

Capital asset pricing model is used to calculate the expected rate of return for an investment on basis of its risk, market risk premium and risk free rate. The formula for the expected rate of return is:

Expected rate of return = Risk free rate + beta ( market risk premium )

Expected rate of return = 5% + 1.45 ( 8.5% )

Expected rate of return = 5% + 12.325%

Expected rate of return = 17.325%

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Better Houses, Inc. has been contracted to build an addition on the Joyners' house. It built half of the addition and then unexpectedly announced that it was not going to finish the job. Such a desertion of work is called "Abandonment of contractual obligations".

<h3>What is contractual obligations?</h3>

Contractual obligations are responsibilities that each party is bound by law to fulfill under the terms of the agreement.

Each contract involves one or both parties exchanging anything of value in connection with a variety of duties, such as goods, services, money, etc.

Elements of a Contract are-

  • Offer: An offer was made when one of the parties pledged to carry out or refrain from carrying out a specific action in the future.
  • Promise of consideration: A promise of something of value in return for the intended conduct or inaction. This can be demonstrated by a substantial outlay of resources, a promise to provide a service, a commitment not to do something, or reliance on the promise. The incentive for the parties to enter into the agreement is known as consideration.
  • Acceptance: The offer was unmistakably accepted. Acceptance can be demonstrated through words, actions, or by carrying out the contract's requirements. In general, the terms of the acceptance must match those of the offer. If not, the acceptance is interpreted as a counteroffer and rejection.

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8 0
2 years ago
1. Under a shipment contract, the seller is required only to the goods into the hands of a carrier and title passes to the buyer
taurus [48]

Answer:

<h2>1) The answer is option a) or True.</h2><h2>2) Generally all contracts are assumed to be <u>Shipment </u> contracts if nothing to the contrary is stated in the contract.</h2><h2>3) The seller is required to deliver the goods to a particular destination in a destination contract,usually directly to the <u>buyer</u><u>.</u></h2><h2>4) The answer is option a) or True.</h2><h2 />

Explanation:

  1. A shipment contract mandates that the seller of any good or service is obligated to deliver the specified shipment to a common carrier for delivery to the buyer but not directly to the buyer's destination.Under  the shipment contracts,the seller is not responsible for the condition of the shipment or package during the delivery point and time to the buyer.
  2. If nothing is specifically mentioned in the contract regarding the delivery of the shipment,it assumably qualifies as a shipment contract and the seller is only liable to dispatch the shipment to the transportation carrier and not obligated to send it directly to the buyer's destination.
  3. Under a destination contract,the seller is officially obligated to dispatch the concerned goods or shipment directly to the buyer's actual destination.Hence,the seller's obligation is incomplete until the shipment subsequently reaches the buyer's destination.
  4. For destination contract,at the point of delivery,the burden of risk and title associated with the condition and ownership of the specified shipment is passed onto the buyer and seller is not officially or legally liable regarding the same.
3 0
3 years ago
If the present value of $280 paid one year from now is $250 what is the one-year discount factor?
OleMash [197]

Answer:

12%

Explanation:

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i.e., i =  (Fv/pv )-1

i=  (280/250) - 1

i = 1.12-1

i=12%

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