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sergey [27]
3 years ago
9

If the market risk premium is 8%, then according to the capm, the risk premium of a stock with beta value of 1.7 must be:

Business
1 answer:
Zinaida [17]3 years ago
4 0

The Capital Asset Price Modeling (CAPM) gives the formula for calculating the expected return of an asset given the risk as:

Rs = Rf + β<span> (Rm – Rf)
Where,</span>

Rs = expected return of the financial asset

Rf = risk free rate of return

β = beta value of the asset

Rm = average return on the capital market

The factor (Rm – Rf) is also called as the market risk premium while the factor (Rs – Rf) is the stock risk premium.

Rs – Rf = β (Rm – Rf)

Rs – Rf = 1.7 (0.08)

Rs – Rf = 0.136 = 13.6%

Answer:<span> greater than 12%  (= 13.6%)</span>

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When writing about a work of art which question would contribute most to your evaluation?
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<span>When writing about a work of art, the question that would contribute most to my evaluation is the connection the art has established to me. In every art i see, i judged it first on the connection and the feel i got before knowing how it must be interpreted in order to get a raw emotion from myself.</span>
6 0
3 years ago
In violation of company policy, lowell company erroneously capitalized the cost of painting its warehouse. the auditors examinin
poizon [28]

Answer: Examining the construction work orders supporting items capitalized during the year.

Explanation:

When the Auditors start to examine the work orders that support the Capitalization of items during the year, they will come across the work order for Painting the Warehouse.

Painting a warehouse is not to be capitalized if it had nothing to do with getting the warehouse ready for use by the company.

8 0
4 years ago
On June 10, 2020, Ebon, Inc. acquired an office building as a result of a like-kind exchange. Ebon had given up a factory buildi
lakkis [162]

Answer:D. The holding period of the office building includes the holding period of the factory building

Explanation:

The holding period simply refers to the period of time that a particular investment is being held by an investor.

The holding period csn.also be referred to as the period between when a security is purchased and when it is sold.

With regards to the question, the holding period of the office building includes the holding period of the factory building. Therefore, the correct option is D.

4 0
3 years ago
During the current year, Bradford Company purchased some of the 90,000 shares of common stock, par $ 6 , of Hall, Inc., as a lon
jok3333 [9.3K]

It's a long-term investment and the company owns 45% of shares of Hall Inc. Hence the company exercises significant influence over Hall Inc.

The various journal entries on the transaction occured would be  made as under:

No. Account Name                     Debit                                Credit

1. Investment                         1296000  

 Cash                                                                         1296000

     

2. Investment                           97650  

 Investment income

           (217000 x 45%)                                                            97650

     

3. Cash                                       64800  

 Investment (1.60 x 40500)                                                64800

         

The effect on the cash flow statement will be:

Operating activities:  

                                   No effect        0

Investing activities:  

        Purchase of investment -1296000

            Receipt of dividends 64800

The current stock price is also known as the marketplace fee. it's far the fee at which a share of inventory or every other security is ultimately traded. In an open market, the modern charge functions as a baseline . Divide equity by the wide variety of stocks issued. If, say, the company's well worth $10 million and there are 10,000 shares, the share fee of every percentage is $1,000.

Learn more about The share market here:- brainly.com/question/690070

#SPJ4

 

3 0
2 years ago
Complete the following sentence.
tiny-mole [99]

Answer:

Auditor

Explanation:

If an interviewer has suspicions of fraud, the interviewer may call on a fraud AUDITOR to assess the situation.

This is because a FRAUD AUDITOR is a type of auditor who based on his experience and background, works as a professional in the gathering of verifiable evidence in terms of fraud and eventually serves as an expert witness during the legal proceeding of such cases.

8 0
3 years ago
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