Answer:
20.43%
Explanation:
Given;
Beta of stock A = 1.7
Beta of the stock B = 0.8
Expected return on stock B = 12%
Risk free rate of stock A = Risk free rate of Stock B = 4.5% (Since same reward-to-risk ratio)
Now,
The expected return of stock B
= Risk free rate + (Beta × Market Risk premium)
on substituting the respective values, we get
12% = 4.5% + (0.8 × Market Risk premium )
or
Market Risk premium = 9.375%
Also,
The expected return of stock A
= 4.5% + (1.7 × 9.375)
or
= 20.43%
lol lol u givin only 15 points
Answer:
$498,339
Explanation:
WACC= wcrs+ wd(1 −T)rd
= (0.8)(0.14) + (0.2)(0.07)(1 −0.4)
= 0.1204
= 12.04%
V= FCF/WACC
g = 0
FCF = NOPAT
= EBIT(1 −T)
V= $100,000(1 −0.4)/0.1204
= $498,338.87
Approximately $498,339.
Therefore If this plan were carried out, what would BB's new value of operations will be $498,339
Answer:
4.5 and 3
Explanation:
We know that
Real exchange rate = Nominal exchange rate × (Cost of the basket in US ÷ Cost of the basket in Norway)
So according to this formula, the computation is shown below
When the nominal exchange rate is 3, then the real exchange rate would be
= 3 × (60 ÷ 40)
= 4.5
When the nominal exchange rate is 2, then the real exchange rate would be
= 2 × (60 ÷ 40)
= 3
