Answer:
Stock Y has overvalued and Stock Z as undervalued
Explanation:
In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below
Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
For Stock Y
= 4.85% + 1.40 × 7.35%
= 4.85% + 10.29%
= 15.14%
For Stock Z
= 4.85% + 0.85 × 7.35%
= 4.85% + 6.2475%
= 11.0975%
The (Market rate of return - Risk-free rate of return) is also called market risk premium and the same is applied in the answer
As we see the expected return of both the stock So, Stock Y has overvalued and Stock Z as undervalued
Answer:
Value of preferred stock will be $140
Explanation:
We have given par value of preferred stock = $100
Dividend rate = 14 %
Discount rate on preferred stock = 12%
Preferred stock dividend ![=face\ value\times dividend\ rate=100\times 0.14=14](https://tex.z-dn.net/?f=%3Dface%5C%20value%5Ctimes%20dividend%5C%20rate%3D100%5Ctimes%200.14%3D14)
We have to find the value of preferred stock
Value of preferred stock ![=\frac{preferred\ stock\ dividend}{discount\ rate}=\frac{14}{0.1}=140](https://tex.z-dn.net/?f=%3D%5Cfrac%7Bpreferred%5C%20stock%5C%20dividend%7D%7Bdiscount%5C%20rate%7D%3D%5Cfrac%7B14%7D%7B0.1%7D%3D140)
So value of preferred stock will be $140
The unit cost per service is calculated by dividing the total operating cost of services by the number of service units.
In the given problem, the operating expenses are $9,000 which shall be considered the cost of services provided. And the number of the service unit is given 46 units.
Hence, unit cost per service shall be $9,000/46 = <u>$195.65</u>
Note: We have rounded off the final answer to the nearest cent or two decimal places.
Answer: (D) all of the above
Explanation:
Economists have identified four types of competition. Perfect competition, monopolistic competition, oligopoly, and monopoly.