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gayaneshka [121]
3 years ago
11

You consider buying a share of stock at a price of $25. The stock is expected to pay a dividend of $1 next year, and your adviso

ry service tells you that you can expect to sell the stock in 1 year for $30. The stock's beta is 1.3, rf is 6%, and market risk premium is 10%. What is the stock's alpha?
Business
1 answer:
nikklg [1K]3 years ago
4 0

Answer:

5%

Explanation:

stock's Alpha = R - Rf - beta (Rm - Rf)

  • R represents the stock's return = $6/$25 = 24%
  • Rf = 6%
  • Beta = 1.3
  • Rm = 16%

Alpha = 0.24 - 0.06 - 1.3 (0.1) = 0.24 - 0.06 - 0.13 = 0.24 - 0.19 = 0.05 = 5%

A stock's Alpha is basically the excess return that the stock yields compared to an specific benchmark, e.g. S&P 500, Dow Jones.

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Consider Paul's decision to go to college. If he goes to college, he will spend $90,000 on tuition, $15,000 on room and board, a
Katen [24]

Answer:

B. $123,000

Explanation:

The computation of the Paul's cost of going to college is presented below:

= Tuition fees + room and board charges + books expenses + earning as a construction job - room and board charges

= $90,000 + $15,000 + $7,000 + $22,000 - $11,000

= $123,000

We simply deduct the room and board charges while working as a construction job and the other items would be added

4 0
3 years ago
Which of the following are the names given to the two types of stock purchasers?
AlekseyPX

Answer: Common and Preferred Stock Purchasers

Explanation:

6 0
1 year ago
FIllmore Company began operations on Sept. 1 by purchasing $4,400 of inventory and $750 of cleaning supplies. During the month,
jarptica [38.1K]

Answer: $3,400

Explanation:

Gross Profit = Sales revenue - Cost of Goods sold

Cost of good sold = Opening stock + Purchases of inventory - Closing stock of inventory

= 0 + 4,400 - 1,800

= $2,600

Gross Profit = 6,000 - 2,600

= $3,400

5 0
2 years ago
Architects consider this when designing a building.
frozen [14]
When designing a building an architect consider following things;
<span>The site or place where the building is going to be constructed, second thing he considered is engineering, another thing he considered while designing is the needs of the user and the materials which are going to be used in constructing a building.</span>
5 0
3 years ago
The approved detail design resulting from the __________ serves as a basis for making the decision to begin production. Systems
wel

Answer: Critical Design Review

Explanation:

A Critical Design Review is referred to as a review that's fine in order o ensure that a system can be able to move into fabrication, and test and also ensure that the stated performance requirements are met.

The approved detail design resulting from the critical design review serves as a basis for making the decision to begin production.

3 0
2 years ago
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