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Taya2010 [7]
4 years ago
11

The real risk-free rate is 2.0% and inflation is expected to be 2.75% for the next 2 years. A 2-year Treasury security yields 5.

35%. What is the maturity risk premium for the 2-year security
Business
1 answer:
bekas [8.4K]4 years ago
3 0

Answer:

0.6%

Explanation:

From the question above the values given are

Treasury security rate= 5.35%

Real risk free rate= 2.0%

Average inflation rate= 2.75%

Market risk premium= ?

The market risk premium can be calculated as follows

Treasury security rate= Real risk rate+Average inflation rate+Market risk premium

5.35%= 2.0%+2.75%+market risk premium

5.35%= 4.75%+market risk premium

5.35%-4.75%= market risk premium

0.6%= market risk premium

Market risk premium is 0.6%

Hence the market risk premium for the 2-year security is 0.6%

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X Corporation and its two divisions, Domestic and Foreign, appear below:
anyanavicka [17]

Answer: $192,200

Explanation:

Based on the information that have been provided in the question, the segment margin for the domestic division will be calculated as:

Segment Margin = Segment Sales Revenue - Segment Variable Expenses - The Traceable Fixed Cost

= $640,000 - $371,300 - $76,500

= $192,200

5 0
3 years ago
Given the following data: Average operating assets $ 504,000 Total liabilities $ 23,520 Sales $ 168,000 Contribution margin $ 85
kipiarov [429]

Answer:

9%

Explanation:

According to the given situation, the solution of return on investment is shown below:-

Return on investment = (Net operating income ÷ Average operating assets) × 100

now, we will put the values into the above formula

= ($45,360 ÷ $504,000) × 100

= 0.09 × 100

= 9%

Therefore for computing the return on investment we simply applied the above formula.

7 0
3 years ago
To increase total asset turnover, management must either increase sales or reduce total stockholders’ equity.A. TrueB. False
8090 [49]

Answer:

<u><em>FALSE</em></u>

Explanation:

Remember, total asset turnover is calculated using a ratio that measures how the management was able to use its assets to efficiently increase sales. Usually the total asset turnover is gotten by dividing a<em> company's sales </em>by its <em>total assets.</em>

<em />

To increase sales, management should <em>continue</em> to use its existing assets (not making purchase of any new asset), and at the same time reducing their purchases of inventory.

7 0
3 years ago
Five-year-old lilah is beginning to show signs of being able to plan ahead in a somewhat rational manner. at her age, this devel
RideAnS [48]
<span>This would be her frontal lobe. This part of the brain is responsible for higher-order thinking and rational decision-making. Neural network growth is expansive at early ages, with children being able to make decisions for themselves that show signs of being rational and thought-out.</span>
4 0
4 years ago
Makers Corp. had additions to retained earnings for the year just ended of $261,000. The firm paid out $194,000 in cash dividend
gladu [14]

Answer:

a. $3.5 per share

b. $1.49 per share

c. $38.38 per share

d. 1.93 times

Explanation:

The computation is shown below:

a. Earning per share = (Net income) ÷ (Number of shares)

where,

Net income =  Additions to retained earnings + cash dividends

                    = $261,000 + $194,000

                    =  $455,000

So, the earning per share equal to

= $455,000 ÷ 130,000 shares

= $3.5 per share

b. Dividend per share = (Total dividend) ÷ (number of shares)

= ($194,000) ÷ (130,000 shares)

= $1.49 per share

c. Book value per share = (Total equity) ÷ (number of shares)

= ($4,990,000) ÷ (130,000 shares)

= $38.38 per share

d. Market to book ratio = (Market price per share) ÷ (book value per share)

= $74 ÷ $38.38

= 1.93 times

7 0
4 years ago
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