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
Simora [160]
3 years ago
13

The common stock of Detroit Engines has a beta of 1.34 and a standard deviation of 11.4 percent. The market rate of return is 11

.5 percent and the risk-free rate is 4 percent. What is the firm's cost of equity?
A. 10.05 percent
B. 12.98 percent
C. 14.05 percent
D. 15.50 percent
E. 15.67 percent
Business
1 answer:
stealth61 [152]3 years ago
6 0

Answer:

The firm's cost of equity is C. 14.05 percent

Explanation:

Hi, we need to use the following formula in order to find the cost of equity of this firm.

r(e)=rf+beta(rm-rf)

Where:

r(e) = Cost of equity

rf = risk free rate

rm = Market rate of return

Everything should look like this.

r(e)=0.04+1.34(0.115-0.04)=0.1405

So, this firm´s cost of equity is 14.05%

Best of luck

You might be interested in
Zahra's Decoratives produces and sells a decorative pillow for $97.50 per unit. In the first month of operation, 2,000 units wer
GalinKa [24]

Answer:

$38,675

Explanation:

sales price per pillow $97.50

total production 2,000 units

total sales 1,750 units

costs:

variable costs $22.10 per unit

fixed manufacturing $13.00 per unit

fixed administrative expenses $19.50 per unit

variable costing assigns only variable costs to inventory and COGS, so the COGS using variable costing = 1,750 units x $22.10 = $38,675

under variable costing, all fixed costs are period costs (fixed manufacturing and fixed administrative).

4 0
3 years ago
Paradise Corporation budgets on an annual basis for its fiscal year. The following beginning and ending inventory levels (in uni
Reika [66]

Answer:

485,000 units

Explanation:

The computation of the number of units manufactured is shown below:

= Number of units sold + ending finished goods units - beginning finished goods units

= 515,000 units + 87,000 units - 57,000 units

= 485,000 units

Basically we added the ending finished goods units and deduct the beginning finished goods units to the number of units sold                      

7 0
3 years ago
Under herbert hoover, the food administration raised the price of grain so that
Fofino [41]

Hoover raised the prices of wheat and grains during World War 1 in order to incentivize farmers to produce more for the market.  

8 0
3 years ago
Jalissa owns a sandwich shop and wants to expand her business. She has talked to other local shop owners for ideas about how to
alex41 [277]
I think it might be A! i’m not totally sure
6 0
3 years ago
Read 2 more answers
At December 31, 2020 and 2021, Oriole Company had outstanding 4000 shares of $100 par value 6% cumulative preferred stock and 18
Anna11 [10]

Answer:

See below

Explanation:

2020 2021

Allocation to preferred stock

Nil 44,600

Remainder to common stock

Nil 20,000

4 0
2 years ago
Other questions:
  • QS 23-10 Sell or process further LO A1 Holmes Company produces a product that can be either sold as is or processed further. Hol
    7·1 answer
  • Custom Engines Company has the following estimated costs for the upcoming year: Direct labor costs $62,300 Direct materials used
    14·1 answer
  • If your business operates in more than one state or in a large area, it's a good idea to register the trademark with what organi
    13·1 answer
  • Church Inc. is presently enjoying relatively high growth because of a surge in the demand for its new product. Management expect
    14·1 answer
  • Which of the following is used to track and gather information without knowledge or authorization?
    5·1 answer
  • Variable Costing
    8·1 answer
  • nternational trade can have big effects on domestic markets. For both an import good and an export good (in other words, address
    14·1 answer
  • Rebecca sells her personal scooter for $550. She purchased the scooter for $700 three years ago. She also sells a painting for $
    12·1 answer
  • Spencer Company consigned 88 freezers, costing $490 each, to Remmers Company.
    9·1 answer
  • Suppose that actual inflation is 3 percent, the Fed's inflation target is 2 percentage points, and unemployment rate is 3 percen
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!