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Auditors-Are-Us LLC, audited the financial statements of LINKCO Industries, a private company, for the year ended December 31, 2

Finger [1]

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4 0

3 years ago

Suppose that the equation for the SML is Y = 0.05 + 0.07X, where Y is the average expected rate of return, 0.05 is the vertical

timurjin [86]

Answer:

Risk free interest rate is 5%

Y is 15.5% at a Beta of 1.5

X is 0.29 when Y is 7%

Explanation:

Risk free interest is 0.05 which 5% as given in the equation

The average expected return is given by Y

Y=0.05+0.07X

Since Beta is the same as X, when equals 1.5,Y is calculated thus

Y=0.05+0.07(1.5)

Y=0.05+0.105

Y=0.155

Y=15.5%

The value of Beta at an average return of 7% is computed thus:

7%=0.05+0.07X

where X is the unknown

0.07=0.05+0.07X

0.07-0.05=0.07X

0.02=0.07X

X=0.02/0.07

X=0.29

The scenario illustrates that the Beta, which is the risk of investment and the Y , the expected average return are positively correlated.

6 0

3 years ago

Data concerning Pellegren Corporation's single product appear below: Fixed expenses are $531,000 per month. The company is curre

GrogVix [38]

Answer:

a. decrease of $18,000

Explanation:

The calculation of overall effect on the company's monthly net operating income is shown below:-

<u>Particulars Current Proposed </u>

Sales $800,000 $837,000

($200 × 4,000) (200 - 14) × (4,000 + 500)

Variable

expenses $160,000 $180,000

(40 × 4,000) (40 × (4,000 + 500))

Contribution

margin $640,000 $657,000

Fixed

expenses $531,000 $566,000

($531,000 + 350,00)

Net operating

income $109,000 $91,000

Decrease in net operating income is

= $109,000 - $91000

= $18,000

6 0

3 years ago

Which type of promotion would you use to attract costumers quickly with the help of coupons, samples, and free gifts?

kicyunya [14]

Answer:

Sales promotion

Explanation:

Sales promotion is a marketing strategy of stimulating the demand for a product by offering attractive incentives to customers or retailers. Sales promotion aims at increasing the sales volumes of a product. It involves the use of persuasive tactics to convince the customer to buy. The effects of a sales promotion are usually short-term but may lead to the acquisition of long term customers. Some of the sales promotions commonly used include

Issuing discount coupons.
Free gifts
Discount vouchers
Loyalty cards

4 0

3 years ago

Read 2 more answers

Statement of retained earnings Hayes Enterprises began 2019 with a retained earnings balance of $ 928 comma 000. During 2019,

Temka [501]

Explanation:

a. The preparation of the statement of retained earnings for the year ended December 31, 2019 is presented below:

Hayes Enterprises

Statement of retained earnings

For the year ended December 31, 2019

Beginning balance of retained earning $928,000

Add: Net income $377,000

Less: Cash Dividend paid

Preference stock dividend -$47,000

Common stock dividend $210,000

Ending balance of retained earning $1,048,000

The common stock dividend is

= $928,000 + $377,000 - $47,000 - $1,048,000

= $210,000

b. The earning per share is

Earning Per share = (Net income - Preferred Dividends) ÷ (Average Common shares outstanding)

= ($377,000 -$47,000) ÷ (140,000 Shares)

= $2.36 per share

C. Dividend per share = Common Stock dividend ÷ Common Shares outstanding

= $210,000 ÷ 140,000 shares

= $1.50

8 0

3 years ago

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