Answer:
The correct answer is 5.76%
Explanation:
Std. Dev. of C = (80/100) × 7.20% + (20/100) × 0%
Std. Dev. of C = (80/100) × 7.20%
Std. Dev. of C = .8 × 7.20% = 5.76%.
Answer:
9.09%
9.327%
Explanation:
For computing the weighted cost of capital first we have to determine the cost of preferred stock, cost of common stock and the after cost of debt is shown below:
The Cost of preferred stock is
= Preferred dividend ÷ market price of preferred stock
= $2.50 ÷ $25
= 10%
The cost of common stock is
= (Expected dividend ÷ market price) + growth rate
= ($1.50 ÷ $20) + 0.05
= 12.50%
And, the after cost of debt is
= Before cost of debt × (1 - tax rate)
= 0.08 × (1 - 0.35)
= 5.2%
Now the WACC is
= Weightage of debt × cost of debt + (Weightage of preferred stock) × (cost of preferred stock) + (Weightage of common stock) × (cost of common stock)
= (0.45 × 5.2%) + (0.05 × 10%) + (0.50 × 12.5%)
= 2.34 + 0.5 + 6.25
= 9.09%
In the second case, the WACC is
= Weightage of debt × cost of debt + (Weightage of preferred stock) × (cost of preferred stock) + (Weightage of common stock) × (cost of common stock)
= (0.30 × 5.2%) + (0.05 × 10%) + (0.65 × 12.5%)
= 0.702 + 0.5 + 8.125
= 9.327%
The efficient market theory would be violated if investors earned extraordinary returns months after a company announced unexpected profits. Thus, the correct option is (d.) Investors earn abnormal returns months after a firm announces surprise earnings.
<h3>What exactly is the hypothesis of an efficient market?</h3>
The efficient-market hypothesis is a financial economics concept that asserts asset prices represent all available information. Because market prices should only react to fresh information, it is impossible to continually "beat the market" on a risk-adjusted basis.
Because the EMH is expressed in terms of risk adjustment, it can only offer testable predictions when combined with a specific risk model. As a result, financial economics research has focused on market anomalies, or departures from specified risk models, since at least the 1990s.
To learn more about Efficient-market hypothesis, click
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Answer:
True
Explanation:
The right to private property is a natural right, but that right is of the negative type, that means that the right ends when it affects the rights of other people.
If you own private property, but the use of your private property is damaging the property of others, then, you have to change the way you are using it until the damages no more the other person's property.
If for example you own a house, and play loud music every night, your are infringing your neighbors right to sleep inside their private property (their houses), therefore, you must stop playing the loud music so that you do not damange your neighbors property anymore.
Answer:
Nico invest $2500 at 9% interest rate and $800 at 4% interest rate.
Explanation:
He invests some money at 9%, and $1700 less than that amount at 4 %.
Let Nico invest $x at 9%.
It means he invest $( x-1700) at 4%.
The investments produced a total of $257 interest in 1 yr.
Add 68 on both sides.
Divide both sides by 0.13.
Nico invest $2500 at 9% interest rate.
Nico invest $800 at 4% interest rate.
Therefore Nico invest $2500 at 9% interest rate and $800 at 4% interest rate.
