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Scorpion4ik [409]
4 years ago
11

TJ Co. stock has a beta of 1.45, the current risk-free rate is 5.75, and the expected return on the market is 14 percent. What i

s TJ Co's cost of equity?
Business
1 answer:
natta225 [31]4 years ago
7 0

Answer:

17.71%

Explanation:

For this problem, we will be making use of the Capital Asset Pricing Model (CAPM) equation, as seen below:

ERi = Rf + β(ERm - Rf)

  • ERi = expected return of investment
  • Rf = risk free investment = 5.75%
  • β = beta of the investment = 1.45
  • (ERm - Rf) = market risk premium = 14% - 5.75% = 8.25%

ERi = 5.75% + (1.45 x 8.25%) = 5.75% + 11.96%  = 17.71%

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Answer:Churning

Explanation: My teacher told us in class

6 0
2 years ago
Wisconsin Farm Equipment Company sold equipment for cash. The income statement shows a loss on the sale of $ 10 comma 000. The n
tester [92]

Answer:

A. positive cash flow of $ 20 comma 900 from investing activities

Explanation:

book value - sales price = loss on sale

30,900 - sales price = 10,000

30,900 - 10,000 = sales price

sales price = 20,900

Assumming the purchase was on cash, it will be disclosure as cash generated from investing activities for 20,900

The reason is that cashflow do not focus on the gain or loss from the sale. It focus on the cash movements and this sale involve a cashinflow of 20,900

3 0
3 years ago
You receive five annual cash flows of $10,000 with the first cash flow being received today and the last cash flow occurring 4 y
ivanzaharov [21]

Answer:

FV= $75,437.02

Explanation:

Giving the following information:

Number of cash flows= 5

Cash flow= $10,000

Total number of periods= 10 years

Interest rate= 6% compounded annually

<u>First, we need to calculate the future value of the 5 cash flows in 5 years using the following formula:</u>

<u></u>

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

FV= {10,000*[(1.06^5) - 1]} / 0.06

FV= $56,370.93

<u>Now, the value at the end of 10 years:</u>

FV= PV*(1+i)^n

FV= 56,370.93*(1.06^5)

FV= $75,437.02

7 0
3 years ago
Causes and effects of International Factor Mobility
tatiyna

Answer:

Domestic factor mobility. refers to the ease with which productive factors like labor, capital, land, natural resources, and so on can be reallocated across sectors within the domestic economy. Different degrees of mobility arise because there are different costs associated with moving factors between industries.

Explanation:

3 0
3 years ago
"A(n) _________________________ involves the free flow of products and factors of production among member-countries and the adop
melisa1 [442]

Answer:

"An economic and monetary union involves the free flow of products and factors of production among member-countries and the adoption of a common external trade policy, but it also requires a common currency, harmonization of members tax codes, and a common monetary and fiscal policy."

Explanation:

A monetary and economic union is a common market with a common currency. Monetary unions have not necessarily created a common market; in fact, the only monetary and economic union in the world is the Eurozone of the European Union, made up of members of the Union who have adopted the euro as their state currency. It is considered one of the most advanced stages of economic integration.

3 0
3 years ago
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