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svetoff [14.1K]
2 years ago
8

The Nixon Corporation’s common stock has a beta of 1.3. If the risk-free rate is 4.4 percent and the expected return on the mark

et is 10 percent, what is the company’s cost of equity capital?
Business
1 answer:
Xelga [282]2 years ago
8 0

Answer:

11.68%

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)

= 4.4% + 1.3 × (10% - 4.4%)

= 4.4% + 1.3 × 5.6%

= 4.4% + 7.28%

= 11.68%

The (Market rate of return - Risk-free rate of return)  is also called market risk premium

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The exponential smoothing forecasting technique slowly responds to changes in the mean level of demand when A. a small alpha val
VLD [36.1K]

Answer:

a small alpha value is used.

Explanation:

The exponential smoothing forecasting technique is used for forecasting a time series when there is no trend or seasonal pattern, but the mean of the time series is slowly changing over time.

The choice of the smoothing constant α (alpha) is important in determining the operating characteristics of exponential smoothing. The smaller the value of α (alpha), the slower the response. Therefore when a small alpha value is used the exponential smoothing forecasting technique slowly responds to changes in the mean level of demand.

When the values of α (alpha) are larger this makes the smoothed value to react quickly – not only to real changes but also random fluctuations.

5 0
3 years ago
Stallman Company took a physical inventory on December 31 and determined that goods costing $275,260 were on hand. Not included
Tpy6a [65]

Answer:

Inventory at year-end: 344,000

Explanation:

The inventory should add the purchased goods from Pelzer as the possesion is transfer at shipping point.

The sales units to Alvarez should also be included as teh transfer is not complete yet. The term on this transaction are at destination.

Total inventory in transit: 28,940 + 39,800 = 68,740‬

on hand:   $   275,260

in-transit:  $<u>     68, 740  </u>

Total:         $  344,000

5 0
3 years ago
When Volvo runs ads suggesting that its cars are the safest that money can buy, it is trying to ________. A) segment the market
kaheart [24]
D! Hope this helps out!
4 0
2 years ago
What are examples of explicit cost?A. the amount of money the owner could have made by investing in an alternative activity B. t
STatiana [176]

Answer:

B. the cost of the business owner’s time and labor paying for gas for a company vehicle

Explanation:

Explicit cost are known as actual costs. They are costs incurred in the running of a business or in the production process . They are usually reported in the financial statements.

Implicit costs are opportunity costs.

4 0
2 years ago
Leather ShopLeather Shop earned net income of $57,000 after deducting depreciation of $5,000 and all other expenses. Current ass
slavikrds [6]

Answer:

$75,000

This option has not been provided

Explanation:

Cash provided by operating activities

Net Operating Income

Add: Depreciation

Add: Decrease in current assets

Add: Increase in Current Liabilities

Using the information in question, we have

Cash Provided by operating activities = $57,000 + $5,000 + $4,000 + $9,000 = $75,000

None of the above is the right answer as the correct option is not available.

8 0
2 years ago
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