Answer:
17.10%
Explanation:
The computation of the cost of equity is shown below:
In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below
Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
= 6.10% + 1.25 × 8.8%
= 6.10% + 11%
= 17.10%
The (Market rate of return - Risk-free rate of return) is also known as market risk premium and the same is applied.
All other information which is given is not relevant. Hence, ignored it
Answer:
Asper Corporation has provided the following data for February. Denominator level of activity 7,700 machine-hours Budgeted fixed manufacturing overhead costs $ 266,420 Fixed component of the predetermined overhead rate $ 34.60 per machine-hour Actual level of activity 7,900 machine-hours Standard machine-hours allowed for the actual output 8,200 machine-hours Actual fixed manufacturing overhead costs $ 259,960 The budget variance for February is $6,460 Favorable.
Explanation:
Budgeted fixed manufacturing overhead cost = $266,420.
Actual fixed manufacturing overhead costs = $259,960
The budget variance for February is calculated as below:
Budget Variance = Actual Fixed Manufacturing Overheads - Budgeted Fixed Manufacturing Overheads
Budget Variance =$259,960 - $ 266,420.
Budget Variance = -$6,460
Budget Variance = $6,460 Favorable
Answer:
The final value of the investment after 3 years is $7,146.10
Explanation:
Giving the following information:
Investment= $6,000
Interest rate= 6% compounded annually
The number of years= 3 years.
To calculate the final value, we need to use the following formula:
FV= PV*(1+i)^n
FV= 6,000*(1.06^3)
FV= $7,146.10
The final value of the investment after 3 years is $7,146.10
Answer:
The answer is $47.6
Explanation:
Solution
Given that
You bought = 140 shares of Mitchum Trading for $50.07 per share
The quarterly dividend = $.17
The current price = $51.03
So we find the total dividend income you received which is computed below:
The total dividend received = (0.17 * 2) * 140
=(0.34) * 140
= $47.6
Therefore the total dividend of income that you received is $47.6
Answer:
alitalia should do the forward hedge to hedge its transaction exposure
Explanation:
Alitalia can construct the money market hedge as follows
1. borrow Euro whose present value is equal to the amount to be paid.
2. convert it to foreign currency at the current spot rate.
3. place it in a deposit
4. make the payment when the deposit reaches maturity
PV of payment = 10000000/1.05
= 9523809.525
converting in to Euro at the spot rate we get 6802721.09 Euros
so Alitalia has to borrow the above amount and convert it and invest it at 5%.
now the payable amount from the loan is 6802721.09(1+0.03) = 7006802.72 Euros
Hence Alitalia has effective managed to locl in a forward rate of 1.427$/euros (10000000/7006802.72)$/euros
Therefore, alitalia should do the forward hedge to hedge its transaction exposure
