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Elina [12.6K]
3 years ago
7

The stock of Big Joe's has a beta of 1.40 and an expected return of 12.10 percent. The risk-free rate of return is 4.6 percent.

What is the expected return on the market?
Business
1 answer:
leonid [27]3 years ago
7 0

Answer:

5.403%

Explanation:

Calculation for the expected return on the market

Using this formula

Expected return =(Expected return-Risk-free rate of return)/Stock beta +Risk-free rate of return

Where,

Expected return=12.10%

Risk-free rate of return=4.6%

Stock beta =1.40%

Let plug in the formula

Expected return =(0.121-0.046)/0.014+0.046

Expected return =0.075/0.014+0.046

Expected return=5.357+0.046

Expected return =5.403%

Therefore the expected return on the market will be =5.403

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Agency conflicts between managers and shareholders Consider the following scenario and determine whether an agency conflict exis
Ivenika [448]

Answer:

Agency conflicts between managers and shareholders

1. A New Beginning (ANB)

A. Yes; Alexander is misappropriating some of Akiko's wealth by unilaterally purchasing a nonbusiness asset using ANB's funds.

2. The Green Zone Inc. (TGZ):

B. No; although an agency relationship exists between TGZ's management-including Tae as TGZ's chairman and CEO and the firm's shareholders-there is no agency conflict, because no expropriation or wasting of the shareholders' wealth has occurred.

3. In the best interest of shareholders, compensation packages should be structured in a way such that managers have an incentive to maximize the__LONG-TERM____value of the company's common stock price.

4. In addition to well-designed executive compensation packages, two other motivational forces can align the interests of managers with those of their shareholders.

a. Reward the manager with a combination of salary and stock options

b. Let the manager to understand that a takeover can happen if she does not perform well.

5. In the late 1980s and early 1990s, Congress passed legislation making it more difficult for outside investors to stage hostile takeovers. This legislation likely__increases____conflicts between managers and stockholders.

Explanation:

Agency conflicts of interest exist in any relationship where one party is expected to act in another's best interests.  Agency problems or conflicts of interest usually exist between a company's management and the company's stockholders.  But, it can equally exist in a relationship where one party acts against the interest of the other.

5 0
3 years ago
Which of the following ratios use de-levered net income?
ivann1987 [24]

Answer:

c. Return on Assets

Explanation:

The net income usually has an impact of interest expense since interest expense is deducted from  earnings before interest and tax in arriving at net income.

Hence, in order to take out the impact interest expense when computing return on assets, an adjusted net income known as de-levered net income is computed using the below formula:

Net Income + (1-t)xInterestExpense

3 0
3 years ago
Land doesn't cease to exist, and it's not depreciated or covered by property insurance because of its ______.
Marat540 [252]

Land doesn't cease to exist, and it's not depreciated or covered by property insurance because of its Indestructibility. The property insurance coverage might include homeowners insurance, renters insurance, flood insurance, and earthquake insurance. The exception is high-value and the expensive personal property, which is normally covered by purchasing a "rider" to the policy.

If a claim is made, the property insurance policy will either reimburse the insured for the actual cost of the damage or the cost of replacing the problem. The property insurance can include, among the other things, homeowners insurance, renters insurance, flood insurance, and  the earthquake insurance.

To learn more about insurance, click here.

brainly.com/question/27822778

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4 0
2 years ago
Following is Stanley Black & Decker’s income statement for 2016 (in millions): STANLEY BLACK & DECKER, INC. Income State
LekaFEV [45]

Answer:

Gross profit Margin  37.41%

Explanation:

The gross profit margin is the quotient between the gross profit and the sales:

\frac{gross \: profit}{sales} = $gross profit margin

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4 0
3 years ago
It has been alleged that a Coca-Cola water bottling plant in India has caused illegal water shortages in fifty villages that sur
maksim [4K]

Answer:

The correct answer is letter "C": Legal.

Explanation:(4) layers

The Pyramid of Corporate Social Responsibility has four (4) layers: Economic (be profitable), Legal (obey the law), Ethical (Obligation to do what is right, just, and fair), and Philanthropic (be a good corporate citizen). The <em>Legal </em>stage states that law is society's codification of right and wrong. According to this stage, companies must "<em>play by the rules</em>".

Thus, if Coca-Cola in India was causing illegal water shortages in villages surrounding the plant the company was going against the <em>Legal </em>stage.

7 0
3 years ago
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