1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
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.

You might be interested in
Select the item that can be answered by using knowledge. 1. A transaction's order date, amount sold, and quantity ordered 2. Tak
astraxan [27]

Answer: The correct answer is "2. Taking into account external reasons for the recent underperformance of a good salesperson".

Explanation: Knowledge should be applied in cases such as this, since in front of an employee who has poor performance we must take into account the external reasons that influence him and his performance, such as family problems, the death of a family member, etc.

7 0
3 years ago
The demand for loanable funds depends on future income.<br><br> a. True<br> b. False
aliina [53]

Answer:

The answer is "Option b".

Explanation:

The Loanable funds are the amount of all the assets that individuals and companies have agreed to save and lend to creditors instead of for personal use, as an investment.

The earnings are also the foundation for supplying loanable funds. That request for credit funds is focused on lending. This relationship among saving provision and loan request decides its real rate as well as the sum of loans.

6 0
3 years ago
Cary is experiencing cash flow problems during the current year. Rather than foreclose an $80,000 business loan, his bank agrees
Nata [24]

Answer:d. $30,000

Explanation:

The reduction of loan amount from $80,000 to $50,000 means carry has gained the difference of $30,000 by paying less than the value of loan he has received.

On an overall analysis the net asset will improve from -$10,000 to $20,000 but the income from the loan reduction is $30,000 i.e,$80,000 minus $50,000.

6 0
3 years ago
Read 2 more answers
Banc Corp. Trust is considering either a bankwide overhead rate or department overhead rates to allocate $396,000 of indirect co
Viktor [21]

Answer:

(A) $144,000.

Explanation:

For computing the indirect costs allocated to the Commercial Department first we have to compute the per unit cost which is shown below:

Per unit cost = (Allocated department overhead indirect cost) ÷ (total number of direct labor hours)

=  $396,000 ÷ 22,000

= $18

The total number of direct labor hours = Consumer + commercial

                                                                = 14,000 + 8,000

                                                                = 22,000

Now the indirect cost equal to

= Per unit cost × Commercial direct labor hours

= $18 × 8,000

= $144,000

4 0
3 years ago
Rao Construction recently reported $28.00 million of sales, $12.60 million of operating costs other than depreciation, and $3.00
stich3 [128]

Answer:

a. $12.40

Explanation:

EBIT stands for earnings before interest and taxes; therefore, interest and taxes rates should not be considered. The EBIT is determined as the amount from sales deducted by operating costs and depreciation. The EBIT is:

EBIT = \$28.00-\$12.60-\$3.00\\EBIT=\$12.40

The answer is alternative a. $12.40.

6 0
3 years ago
Other questions:
  • Marvin, the CEO of Flexus Inc, believes in sharing problems faced by the company with his employees. He prefers getting ideas an
    8·1 answer
  • When the Wright brothers designed their aircraft, they built a wind tunnel to model the aerodynamics of different wing designs.
    11·1 answer
  • In a recent year Bonita Industries had net income of $130000, interest expense of $50000, and income tax expense of $21000. What
    10·1 answer
  • Technology can either shift the labor demand to the right or to the left, depending on its effect on the marginal product of lab
    15·2 answers
  • If Starbucks raises its price by 5 percent and McDonald’s experiences a 0.5 percent increase in demand for its coffee, what is t
    13·1 answer
  • When products cannot be easily differentiated: A. there is little room for price variations from the competition. B. a skimming
    9·2 answers
  • On October 4, 2018, Sheffield Corporation had credit sales transactions of $5400 from merchandise having cost $2800. The entries
    7·1 answer
  • Yum Foods recently merged with Clean Plates. Which of the following activities should HR perform after the integration process?
    8·1 answer
  • The three steps in the financial planning process are to forecast the firm's short- and long-term needs, develop budgets, and __
    9·1 answer
  • Carver Incorporated purchased a building and the land on which the building is situated for a total cost of $700,000 cash. The l
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!