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guapka [62]
3 years ago
12

A stock has a risk premium of 7.4% and the risk-free rate is 2.1%. What is the stock's fair return? Answer as a percent. Enter o

nly numbers and decimals in your response.
Business
1 answer:
frosja888 [35]3 years ago
8 0

Answer:

9.50%

Explanation:

The risk free rate is a rate which has no financial loss over a certain period. The risk premium is a rate excess of risk free rate. The risk premium is calculated by subtracting risk free rate from rate of return on an investment.

The stocks return will = risk free rate + risk premium

Stock's fair return = 2.1% + 7.4%

Stock's fair return = 9.50%

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Teel Printing uses two measures of activity, press runs and book set-ups, in the cost formulas in its budgets and performance re
juin [17]

Answer:

D. $193,750

Explanation:

Calculation for the wages and salaries in the flexible budget for July

FLEXIBLE BUDGET FOR JULY

Using this formula

Flexible budget= Wages and salaries Cost formula per month+Actual activity press runs*Wages and salaries per press runs+Actual activity book set-ups*Wages and salaries book set-up

Let plug in the formula

Flexible budget=$8,850+201*400+110*950

Flexible budget=$193,750

Therefore the wages and salaries in the flexible budget for July would be closest to $193,750

7 0
3 years ago
Esquire Comic Book Company had income before tax of $1,700,000 in 2016 before considering the following material items: 1. Esqui
mel-nik [20]

Answer:

Explanation:

Partial income statement

For the Year Ended December 31, 2016

Income from continuing operations $975,000

Discontinued operations gain (loss):  

Income from operations of discontinued component $220,000

Income tax expense ($88,000)

Income on discontinued operations $132,000

Net income $1,107,000

Income from operations of discontinued component (including loss on disposal of $420,000) = $220,000

Income from continuing operations:

Income before considering additional items $1,700,000

Decrease in income due to restructuring costs ($75,000)

Before-tax income from continuing operations $1,625,000

Income tax expense (40%) ($650,000)

Income from continuing operations $975,000

5 0
3 years ago
THIS IS FOR CULINARY
enyata [817]

Answer:

D. layoffs

Explanation:

A contingency plan is an alternative plan of action in case of unexpected outcomes. It is devised and kept in place to be implemented in bad times.  A contingency plan is a sort of a  risk mitigation plan to help the business navigate through a bad situation efficiently.

A contingency plan for labor include measures that can help a business overcome tough seasons.  The business may need to layoff some employees to save on labor in times of economic downtime

3 0
3 years ago
In a competitive market, if production (and consumption) continues until the marginal benefit of one more unit equals marginal c
Pachacha [2.7K]

Answer:

False

Explanation:

In a competitive market, if production (and consumption) continues until the marginal benefit of one more unit equals marginal cost, then total surplus is maximized.

As for any extra unit produced

Marginal Benefit > Marginal cost = Surplus

Marginal Benefit = Marginal cost = No Surplus / No loss

Marginal Benefit > Marginal cost = loss

When your Marginal benefit is maximum and Marginal cost is minimum then the surplus will be maximized.

Most efficient situation in which benefit is maximum and the cost is minimum results in maximized surplus.

8 0
3 years ago
Wesimann Co. issued 12-year bonds a year ago at a coupon rate of 7.2 percent. The bonds make semiannual payments and have a par
strojnjashka [21]

Answer:

$1,138.92

Explanation:

Current bond price can be calculated present value (PV) of cash flows formula below:

Current price or PV of bond = C{[1 - (1 + i)^-n] ÷ i} + {M × (1 + i)^-n} ...... (1)

Where:

Face value = $1,000

r = coupon rate = 7.2% annually = (7.2% ÷ 2) semiannually = 3.6% semiannually

C = Amount of semiannual interest payment = Face value × r

C = $1,000 × 3.6% = $36

n = number of payment periods remaining = (12 - 1) × 2 = 22

i = YTM = 5.5% annually = (5.5% ÷ 2) semiannually = 2.75% semiannually  = 0.0275 semiannually

M = value at maturity = face value = $1,000

Substituting the values into equation (1), we have:

PV of bond = 36{[1 - (1 + 0.0275)^-22] ÷ 0.0275} + {1,000 × (1 + 0.0275)^-22}

PV of bond = $1,138.92.

Therefore, the current bond price is $1,138.92.

4 0
3 years ago
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