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White raven [17]
3 years ago
12

Mikkelson Corporation's stock had a required return of 12.50% last year, when the risk-free rate was 3% and the market risk prem

ium was 4.75%. Then an increase in investor risk aversion caused the market risk premium to rise by 2%. The risk-free rate and the firm's beta remain unchanged. What is the company's new required rate of return
Business
1 answer:
hoa [83]3 years ago
7 0

Answer:

Beta = 2

New required rate of return = 16.50%

Explanation:

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)

12.50% = 3% + Beta × 4.75%

12.50% - 3% = Beta × 4.75%

So, the beta would be 2

The (Market rate of return - Risk-free rate of return)  is also known as the market risk premium

Now the required rate of return would be

= 3% + 2 × 6.75%

= 3% + 13.50%

= 16.50%

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Based on the fact that Kim's flowers borrowed the money and used it to buy a new delivery vehicle, this business activity should be categorized as both a financing activity and an investing activity.

<h3>What should they classify this business activity as?</h3>

Because Kim's Flowers got the money as a loan, it would be recorded as an inflow for financial activities.

They then used it to purchase a delivery vehicle which is an investment and a capital asset so this will count as an investment activity.

Find out more on classifying business activities at brainly.com/question/14790406

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8 0
1 year ago
Marianna voluntarily gives up her lunch hour to help her colleague who is struggling to finalize an important report. This is an
Licemer1 [7]

Answer:

correct option is E. organizational citizenship behavior

Explanation:

solution

as per given we know that here Marianna help by gives up her lunch hour for colleague

so we can say this is perfect example of organizational citizenship behavior

because

(1) there job satisfaction is more closely related to contribution than to her core job task

(2) in same study also showed it colleague may not have a lot of work experience

(3) it also allows colleague to feel that they have greater control over the work they are doing

so we can say correct option is E. organizational citizenship behavior

4 0
3 years ago
Read 2 more answers
Molly Madison received "The Employee of the Month" Award at Internal Workings Remodeling Service in April. Molly would be consid
Tems11 [23]

Answer: Internal environment

Explanation: The internal environment is made of the components inside the company comprising of existing workers, administration, atmosphere, tools, job procedures and mostly corporate culture which has the capacity of affecting the workers' attitudes and conclusions of the company. In this case, Molly Madison is considered a part of the internal environment of the internal workings as she received the award for employee of the month.

4 0
3 years ago
The level at which individual is viewed by Society is called​
tatiyna

Answer:

The level at which an individual is viewed by society is called Social Status. ... It is the measure of worth or the position that the 'person holds in society'.

Explanation:

I hope this helps and pls mark me brainliest :)

5 0
2 years ago
The seaport town of New Monopoly has become extremely popular with shipping companies due to its superior location. The port has
attashe74 [19]

Answer:

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Explanation:

Market failure is the economic situation where goods and services are not evenly spread out on the market.

In question resources (location) is in favour of New Monopoly seaport and shipsbare forced to wait and enter the port.

Ideally, in a free market resources are to be efficiently distributed so that people do not have to go to only one place to get a good or service.

It is similar to a monopoly in the free market.

3 0
3 years ago
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