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
SCORPION-xisa [38]
3 years ago
10

The beta of Stock A is –0.4 (indicating that its returns rise when returns on most other stocks fall). If the risk-free rate is

4.5 percent and the expected rate of return on an average stock is 8.3 percent, what is the required rate of return on Stock A?
Business
1 answer:
Marianna [84]3 years ago
4 0

Answer:

=2.98%

Explanation:

Use CAPM to find the required return of the stock;

CAPM: r = risk free + beta(market return - risk free)

risk free = 4.5% or 0.045 as a decimal

beta = -0.4

market return = 8.3% or 0.083 as a decimal

Next, plug in the numbers into the CAPM formula;

r = 0.045 -0.4(0.083 - 0.045)

r = 0.045 -0.0152

r = 0.0298 or 2.98%

Therefore the required return is 2.98%

You might be interested in
Company A entered the production of office software before its competitors. Because of this, the company's products are more fam
Vera_Pavlovna [14]

Answer:

First Mover Strategy.

Explanation:

First Mover strategy is referred to denote such a company's strategy, which is the first one to enter the market before any of its competitors. This gives an advantage to the company, as such companies are identified easily by its customers. Therefore, the answer is 'First mover strategy.'

3 0
2 years ago
What is the best explanation for the slope of the keynesian zone of the aggregate supply curve?
Bond [772]

An increase in aggregate demand when the economy is below potential output increases real output and has little or no effect on price levels.

The Keynesian aggregate supply curve shows that the AS curve is fairly flat. This means that during economic downturns, firms supply the quantity of goods demanded at a particular price level.

The Keynesian zone is on the left side of his SRAS curve and is fairly flat, so movements in aggregate demand affect production but have little effect on price levels.

The Keynesian model suggests that in the short term less flexible wages and prices will push the aggregate supply curve upward. This model makes it more likely that the economy will fall below the full employment level. This means companies can hire new workers and increase production without raising wages or prices.

Learn more about Keynesian at

brainly.com/question/1171653

#SPJ4

8 0
1 year ago
1. Which of the following questions would be permissible to ask during an interview with a candidate who
Marina CMI [18]

Answer:

I would say the first one

Explanation:

beacuse you do need to know if there is anything that could be hard for them to do and make it where they cant do there job it also might depnd on the job of what you would ask them but I would say the fist one so it gets to the point and isent rude hope this helps :)

7 0
3 years ago
Read 2 more answers
The quantity of good Y is measured along the vertical axis, and the quantity of good X is measured along the horizontal axis. If
Degger [83]

Answer:

shifts inward to the left and both intercepts will decline.

Explanation:

A budget line shows the various combinations an individual can purchase of two goods given an income level or budget.

When there is an increase in price, the number of goods that can be bought at all price levels decreases, there is a shift in the budget line to the left.

This is illustrated in the attached diagram. When price increases there is a shift from A'B' to AB

5 0
3 years ago
Todrick Company is a merchandiser that reported the following information based on 1,000 units sold: Sales $ 405,000 Beginning m
skelet666 [1.2K]

Missing information:

Fixed administrative expense $ 16,200 Variable selling expense $ 20,250 Variable administrative expense $ ? Contribution margin $ 81,000 Net operating income $ 24,300

1. Prepare a contribution format income statement.

2. Prepare a traditional format income statement.

3. Calculate the selling price per unit.

4. Calculate the variable cost per unit.

5. Calculate the contribution margin per unit.

Answer:

First we must determine cost of goods sold = $27,000 + $270,000 - $13,500 = $283,500

now we must find total variable costs = total sales - contribution margin = $405,00 - $81,000 = $324,000

variable administrative expenses = total variable costs - COGS - variable selling expense = $324,000 - $283,500 - $20,250 = $20,250

1. Prepare a contribution format income statement.

Total sales                                                              $405,000

<u>Cost of goods sold                                                $283,500</u>

Gross contribution margin                                      $121,500

Variable selling expense                                        $20,250

<u>Variable adm. expense                                          $20,250</u>

Contribution margin                                                $81,000

Fixed period expenses:

  • Fixed selling expense                                   $40,500
  • <u>Fixed administrative expense                       $16,200</u>

Net operating income                                            $24,300

2. Prepare a traditional format income statement.

Total sales                                                              $405,000

<u>Cost of goods sold                                                $283,500</u>

Gross profit                                                              $121,500

Operating expenses:

Selling expenses                                                     $60,750

<u>Adm. expenses                                                       $36,450</u>

Net operating income                                            $24,300

3. Calculate the selling price per unit.

  • $405

4. Calculate the variable cost per unit.

  • $324

5. Calculate the contribution margin per unit.

  • $81
5 0
3 years ago
Other questions:
  • Oscar makes purchases of an existing product (X) such that the marginal utility of the last unit he consumes is 10 utils and the
    8·1 answer
  • Question 1 ____ is the process of moving the organization toward its vision.
    8·1 answer
  • Five years ago, Tom loaned his son John $20,000 to start a business. A note was executed with an interest rate of 8%, which is t
    14·1 answer
  • Cox Engineering performs cement core tests in its laboratory. The following standards have been set for each core test performed
    13·1 answer
  • Which are the four functions motor freight terminals usually serve?
    14·1 answer
  • Câu 1 Bản chất của quản trị chiến lược là phác thảo hình ảnh tương lai của doanh nghiệp trong lĩnh vực hoạt động trên cơ sở khai
    9·1 answer
  • Suppose that a couple of months after the new pizza restaurant opens, the local government institutes a $14 per pizza price ceil
    9·1 answer
  • If bagels and donuts are substitutes, then a decrease in the price of donuts will result in:Multiple ChoiceAn increase in the de
    10·1 answer
  • Blue Ice Inc. is an American corporation. The company started out as a partnership between Nick Selver and Rita Andrew in 1985.
    6·1 answer
  • Write about how bookkeeping is done in a small business and what they can do to improve their business
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!