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3 years ago

What are the two risk components that determine a firm's cost of equity?

1 answer:

5 0

Traditionally, the formulas used to express a firm's cost of equity are the dividend capitalization model and the capital asset pricing model (CAPM).

Explanation:

Generally, two risk components determine a firm's cost of equity. The first is the systematic risk associated with the broader equity market. All firms are exposed to this risk, and it cannot be mitigated through diversification.

The second risk component is the unsystematic risk associated with the firm in question. This risk, often reflected as beta, a measure of the stock's volatility in relation to the volatility of the broader market, can be mitigated via diversification.

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Green Frog is an environmentally friendly firm in the cosmetics industry. Even though Green Frog is environmentally friendly, th

kakasveta [241]

Answer:

D) Growth in earnings per share averaging 15% or better annually for the next five years

Explanation:

First of all, objectives must be well defined and measurable. That is why increasing profitability is a good idea but not a very good strategic objective, since a 0.00001% growth in profits will still comply with it. The same applies with growing market share.

Improving product quality will help improve total sales but it is not a financial objective.

The only financial objective that is precise and measurable is option D, which sets the goal of increasing earnings per share at least 15% every year.

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3 years ago

Which of the following cannot be shown on a production possibilities graph?

choli [55]

I believe the answer is: <span>the allocation method

production possibilities graph could only include the factors that can be projected after doing combination of various products' production.
Allocation method only play role in the technique that can be used to produce the products and cannot be considered as data projection from the production

</span>

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4 years ago

Read 2 more answers

F a taxpayer offers you a $20 bill because they were so happy about the quality service they received, what would be the appropr

BlackZzzverrR [31]

The appropriate action would be: C. <span>Thank the taxpayer, and explain that you cannot accept any payment for your services.
Government workers couldn't receive cash payment in any kind unless there is a necessary administrative purpose.
They could on the other hand, receives Gifts that held the value less than $ 20</span>

6 0

3 years ago

Read 2 more answers

What is a beneficiary? Question 50 options: The person who files insurance claims on your behalf The person who determines wheth

Zina [86]

A beneficiary in the broadest sense is a natural person or other legal entity who receives money or other benefits from a benefactor. For example, the beneficiary of a life insurance policy is the person who receives the payment of the amount of insurance after the death of the insured.

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3 years ago

On January 1, 2018, Race Corp. acquired 80% of the voting common stock of Gallow Inc. During the year, Race sold to Gallow for $

andreyandreev [35.5K]

Answer:

Consolidated income: 954,800 dollars

Explanation:

Gallow income x race participation:

$ 204,000 x 80% = $ 163,200

The gross profit in the infra-entity transaction will be eliminated

$ 450,000 - $ 330,000 = $ 120,000 gross profit

15% remains at Gallow so: $ 120,000 x 15% = $ 18,000 gross profit for the unsold inventory.

We now multiply by Race participation: $ 18,000 x 80% = $ 14,400 unrealized gain.

Consolidated income:

Race income: 806,000

Gallo income 163, 200

unrealized gain (14, 400)

Total: 954,800

3 0

4 years ago