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tresset_1 [31]
3 years ago
8

Thayer Farms stock has a beta of 1.38. The risk-free rate of return is 3.87 percent, the inflation rate is 3.93 percent, and the

market risk premium is 9.03 percent. What is the expected rate of return on this stock?A. 8.35 percent B. 9.01 percent C.10.23 percent D.13.21 percent E. 13.73 percent
Business
1 answer:
KATRIN_1 [288]3 years ago
8 0

Answer:

Cost of Equity  16.33%

Explanation:

We solve for this using CAMP:

Ke= r_f + \beta (r_m-r_f)

risk free = 0.0387

premium market = (market rate - risk free) 0.0903

beta(non diversifiable risk) = 1.38

Ke= 0.0387 + 1.38 (0.0903)

Ke 0.16331 = 16.33%

We are given with the risk free rate of return and the market premium already so we just need to plug into the formula to solve for the expected return on the stock.

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Edna Boyle contracts with The Melonville Times to advertise her garage sale to be held this Saturday. The ad is to run in the Fr
Irina-Kira [14]

Answer:

True

Explanation:

As per the contract details, Melonville Times will telecast and run an advertisement on Friday and in the morning of Saturday, as later during Saturday the sales has to be done.

In case of any failure from Melonvile Times, it is liable to pay $50. Now, by the clause and word enforceable means actionable in real terms.

Since there is a formal written contract between the parties and the purpose of such advertisement and the value in case of any failure is defined, the liquidated damages provided are enforceable.

Note: It is assumed as the organisations are legal and professional all the conditions to make the contract legally valid is true.

Therefore, above stated statement is true.

4 0
3 years ago
Magellan is adding a project to the company portfolio and has the following​ information: the expected market return is 11.6​%,
fredd [130]

Answer:

The beta of the new project is 1.475

Explanation:

The beta is the measure of systematic or market risk associated to a stock. The beta is used in the calculation of the required/expected rate of return under the CAPM model. The CAPM model uses the following formula to calculate the required/expected rate of return,

r = rRF + Beta * (rM - rRF)

Plugging in the available variables, we can calculate the value of the beta.

0.154 = 0.036 + Beta * (0.116 - 0.036)

0.154 - 0.036  =  Beta * 0.08

0.118 / 0.08 = Beta

Beta = 1.475

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3 years ago
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RSB [31]
I believe it's B but I am not positive. I'm taking the test right now.
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3 years ago
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zhuklara [117]
Career outlook is the correct answer
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Strategy is ______. Multiple choice question. a sustainable and dominant market share the set of actions a firm takes to achieve
PtichkaEL [24]

Strategy is a sustainable and dominant market share the set of actions a firm takes to achieve a competitive advantage.

<h3>What is Competitive advantage strategy?</h3>

Competitive advantage can be explained as  factors that influence a company to produce goods or services and be able to stand out compare to her other company in that industry.

These advantages help the company to be able to produce and generate more sales  compared to its market rivals.

Learn more about competitive advantage at:

brainly.com/question/9067127

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2 years ago
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