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Georgia [21]
3 years ago
11

A stock has an expected return of 15.0 percent, its beta is 0.90, and the risk-free rate is 5.3 percent. What must the expected

return on the market be
Business
1 answer:
SSSSS [86.1K]3 years ago
3 0

Answer:

16.07%

Explanation:

The computation of the expected return on the market is shown below

As we know that

Expected Return on stock = Risk free return + beta ( Expected Market Rate of Return - Risk free return )

15 % = 5.3% + 0.90 × (Expected Market Rate of Return - 5.3%)

15 % - 5.3% ÷ 0.90 = Expected Market Rate of Return - 5.3%

10.77% = Expected Market Rate of Return - 5.3 %

So, expected market rate of return is

= 10.77 + 5.3%

= 16.07%

We simply applied the above formula                                                      

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I believe outsourcing is a highly contested idea because people would rather have the products they use produced in their country. I think outsourcing is a good idea because production of a product might be cheaper in another country but sometimes that means a less of quality product.


Brainliest?
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3 years ago
Abe owns a dog; the dog's barking annoys Abe's neighbor, Jenny. Suppose that the benefit of owning the dog is worth $200 to Abe
umka2103 [35]

Answer:

Jenny pays Abe $300 to give the dog to his parents who live on an isolated farm

Explanation:

The answer is already stated within the question, but I'll provide  the explanation.

In order to reach a solution, Jenny would have to offer Abe an amount to get rid of the dog that is more than Abe's benefit of owning the dog, which is $200.

On the other hand, since Jenny bears a cost of $400 from the bark, she would only be willing to spend as much as $400 to resolve the situation. Therefore, the acceptable range for the amount of the agreement for both parts is:

$200 < X < $400.

Since $300 is within that range. Jenny paying Abe $300 to give the dog to his parents is a possible solution.

6 0
3 years ago
Read 2 more answers
The three methods used to classify costs into their fixed and variable components includes:.
ANTONII [103]

The three methods used to classify costs into their fixed and variable components include:

  • scatter diagrams
  • high-low method
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<h3>What is a costs classification?</h3>

This refers to the process of separation of a group of expenses into different categories which are used to bring an management's attention certain costs that are considered more crucial than others, or to engage in financial modeling.

Often time, the purpose of cost classification is to allows the manager control processes and cut costs where needed or send more resources to an area of the process that is lacking.

Furthermore, the cost classification also allows the manage to review reports and advise accounting of needed adjustments in cost classification.

Read more about costs classification

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8 0
2 years ago
You just inherited a trust that will pay you $100,000 per year in perpetuity. However, the first payment will not occur for exac
allsm [11]

Answer:

PV= $620,921.32

Explanation:

Giving the following information:

Cash flow (Cf)= $100,000

Interest rate (i)= 7.25%

<u>First, we need to calculate the value of the investment at the moment of the first payment (five years from now). </u>To calculate the present value we need to use the following formula:

PV= Cf / i

PV= 100,000 / 0.1

PV= $1,000,000

<u>Now, the value today:</u>

PV= FV / (1 + i)^n

PV= 1,000,000 / (1.1^5)

PV= $620,921.32

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Gold Company was experiencing financial difficulties, but was not bankrupt or insolvent. The National Bank, which held a mortgag
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