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Dima020 [189]
3 years ago
11

A stock has an expected return of 13.5 percent, its beta is 1.40, and the expected return on the market is 11.5 percent. What mu

st the risk-free rate be? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Business
1 answer:
uranmaximum [27]3 years ago
6 0

Answer:

The risk free rate is 6.50%

Explanation:

The required rate of return is the minimum return that investors demand/expect on a stock based on the systematic risk of the stock as given by the beta. The expected or required rate of return on a stock can be calculated using the CAPM equation.

The equation is,

r = rRF + Beta * (rM - rRF)

Where,

  • rRF is the risk free rate
  • rM is the return on market

As we know the figures for r, Beta and rM, we will input these figures in the equation to calculate risk free rate.

Let risk free rate be x.

0.135 = x + 1.4 * (0.115 - x)

0.135 = x + 0.161 - 1.4x

0.135 - 0.161  =  x - 1.4x

-0.026  =  -0.4x

-0.026 / -0.4 = x

x =  0.065 or 6.50%

r = 0.1475 or 14.75%

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DaniilM [7]

Answer:

The correct answer is the option A: a principal.

Explanation:

To begin with, the term of <em>''principal''</em> in the field of business refers to the individual who may have many roles inside an organization but he is basically one of the most importants person in the company. Moreover, the figure of the principal is sometimes related to the owner of the business or to the chief executive officer as well. Therefore that Omar is most likely a principal in Precise Service Company.

7 0
4 years ago
A soda manufacturer has two operating departments: mixing and bottling. mixing has 600 employees and bottling has 400 employees.
zhannawk [14.2K]

Cost allocation is a technique of allocating the organization's costs among the various cost centers of the organization. Thus, the office costs allocated to the Bottling department are equal to $128,000.

<h3>What are allocation costs?</h3>

Cost allocation is a technique of supplying relief to shared carrier organization's cost facilities that offer a product or provider. In turn, the related cost is assigned to internal clients' price centers that devour the goods and services.

As per the given information,

Total office costs: $320,000

We have given total number of employees for mixing = 600

And total number of employees for bottling = 400

office costs = $320,000

So total number of employees is equal to 600 plus 400 is 1000 employees.

\rm\,Allocation \,Base\, For\, Mixing: \frac{600}{1,000} = 0.6 \\\\So allocated amount for mixing is 0.6 \times \$320,000 = \$192,000\\\\Allocation \,Base\, for\, Bottling\, = \dfrac{400}{1,000} = 0.4\\\\So allocated amount for bottling = 0.4 \times \$320,000= \$128,000

Thus, the office costs allocated to the Bottling department is equal to $128,000.

Learn more about allocation costs here:

brainly.com/question/26656438

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3 0
3 years ago
Which of the following people would be most appropriate to ask for a letter of recommendation to accompany your college applicat
Nuetrik [128]
the coach of your seventh-grade soccer team

the coach of my seventh-grade soccer team would be most appropriate to ask for a letter of recommendation to accompany your college application because it is the one person who can highlight my character, my attitude and my success. the others - with the exception of the friend - could be great too, but they work better for other types of application.
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3 years ago
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Answer:

internet banking advanced in tech

Explanation:

5 0
2 years ago
The​ monopolist's supply curve A. is the region of its marginal cost curve that lies above the marginal revenue curve. B. ​doesn
SIZIF [17.4K]

Answer: B. ​doesn't exist

Explanation: A monopoly organisation has no well-defined supply curve. This simply means, there is no none unique supply curve for the monopolist derived from his marginal cost curve. Under a perfect competition, short run marginal cost curve located above the shut-down point is known as the supply curve which shows the relationship between price and quantity.

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4 years ago
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