Answer:
(i) and (ii) only
Explanation:
Compared to the monopoly outcome with a single price, imperfect price discrimination
(i) sometimes raises total surplus.
(ii) sometimes lowers total surplus.
Answer:
15.8%.
Explanation:
Calculation for XYZ's cost of equity using the CAPM
Using this formula
Cost of equity = Rrf + βi[E(Rm) - Rrf]
Let plug in the formula
Cost of equity= 6% + 1.06×[15.25% - 6%]
Cost of equity= 6% + 1.06×9.25%
Cost of equity= 15.8%
Therefore the Cost of equity will be 15.8%
Answer:
See explanations for step by step aoproach to answer and see attachment for graph
Explanation:
Plot E(R) = Rf + Beta*(Rm-Rf) as function of beta.
at 1.4
E(R) = 5% + 1.4*(12-5) = 14.8%
E(R) = WfRf + Wa*E(Ra)
= 0.4*5% + 0.6*14.8%
= 10.88%
3. Since, the beta of risk free asset is zero
Bp = wf*Bf + wa*Ba
0.6 = 1.4*wa
wa = 42.8%
wf = 57.2%
d. 14% = 5% + B*(12%-5%)
B = 9/7 = 1.28
e. 2 = wfBf + waBa
wa = 2/1.4
= 142%
It means the portfolio is created by leveraging. Take 42% of value on risk free rate as loan and invest in risky asset.
Answer: The correct answer is a. debit Unearned Rent Revenue, $2,500; credit Rent Revenue, $2,500.
Explanation: Leyland Realty Company receipt of $15,000 represents an unearned revenue because the 6-month rent has not been utilized. Since the term is for 6 months, monthly amortization would be $15,000 ÷ 6 months = $2,500. This amount now serves as the monthly amortization, which would be unwound to revenue and the amount in liability (unearned revenue) would gradually decrease until it becomes zero.
Now that a month has elapsed (1 July - 31 July), an amount of $2,500 calculated above would be unwound to revenue (income statement) by Debiting Unearned revenue $2,500 and Crediting Revenue $2,500.
Answer:
The total cost of vacation pay and pension rights to be recognized the first year is $0
Explanation:
The vacations are expected to be taken the following year for which the vacation pay would be made and the pension rights are expected to be paid over the next 5-30 years. So, no cost is recognized in the first year