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katrin2010 [14]
3 years ago
5

The current risk-free rate of return in the economy is 1.5%. In addition, the market rate of return is currently 6%. Given that

a company’s expected return on common stock is 12.5%, what is the company’s systemic risk level (beta coefficient)?
Business
1 answer:
ludmilkaskok [199]3 years ago
7 0

Answer:

The company’s systemic risk level (beta coefficient) is 2.44%

Explanation:

According to Capm Expected Return of Stock = Risk Free Rate + Beta*(Market Return - Risk Free Rate)

Beta = (Expected Return of Stock - Risk freed Rate)/(Market return -Risk free Rate)

        = (12.5% - 1.5%)/(6% - 1.5%)

        =2.44 %

Therefore, The company’s systemic risk level (beta coefficient) is 2.44%

Systematic risk is the risk which affects all the stocks of the economy. It cannot be diversified away. Example interest rate and inflation in the economy. Beta represents systematic risk of the company.

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Neon Electronics Inc. sourced touch screens required for its tablet computers, cell phones, and televisions from a manufacturer
tamaranim1 [39]

This scenario best illustrate Backward vertical integration

Explanation:

Backward integration is a vertical integration that extends the role of a organization to perform roles traditionally performed by firms in the supply chain.

In other terms, backward integration is where an enterprise imports another company providing the necessary goods or services for production.

For examples, an company might purchase the product or raw materials manufacturer. Businesses often complete retrograde incorporation of these other businesses or combine of them. However, they may set up their own divisions to perform this mission.

7 0
3 years ago
The following information is for the Jeffries​ Corporation: Product​ A: Revenue ​$18.00 Variable Cost ​$14.00 Product​ B: Revenu
shusha [124]

Jeffries Corporation's Operating Income from the two products is <em>A. ​$35,000.</em>

The operating income is the difference between the revenue and operating costs (variable and fixed costs).

Data and Calculations:

                             Product A     Product B     Total

Revenue                 $18.00           $21.00

Variable cost            14.00              13.00

Contribution            $4.00             $8.00

Fixed costs                                                 $143,000

Total sales units                                            35,600

Sales mix                  3                        1               4

Sales units             26,700           8,900      35,600

Total contribution$106,800      $71,200  $178,000

Total fixed costs                                          143,000

Operating income                                      $35,000

Thus, the operating income is $35,000.

Read more: brainly.com/question/14815746

 

5 0
2 years ago
Lardo Inc. plans to build a new manufacturing plant in either Country X or Country Y. It projects gross revenue in either locati
Tom [10]

Answer:

Following are the solution to the given points:

Explanation:

For point a:

After-tax profit for each country.

For Country X:

Particulars \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \  \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ Amount(\$)\\\\Gross \ \ Revenue\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \  \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 4,000,000\\\\ Operating\ \ Expenses \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \  \ \ \ \ \ \ \ \ \ \ \ \ \ \  1,500,000\\\\ Pre-tax \ \ Profit \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 2,500,000 \\\\  

Tax \ [ 2,500,000 \times 20\% \ ] \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \  \ \ \ \ \ \ \ \ \ \ \ \ \ \ 500,000\\\\ After-tax\ \ profit\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 2,000,000

For Country Y:

Particulars \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \  \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ Amount(\$)\\\\Gross \ \ Revenue\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \  \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 4,000,000 \\\\Operating\ \ Expenses \ \ \ \ \ \ \ \ \ \ \ \ \ \  \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \  1,800,000\\\\

Pre-tax\ \ Profit \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \  \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \  2,200,000\\\\Tax\  [40,00,000 \times 10\%] \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \  \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \  400,000 \\\\After-tax\ \ profit \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \  \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \  1,800,000

For point b:

For Country X:

Lardo is expected to establish its new plant in Country X, because Country X's after tax income is higher than Country y's after-tax income [$1,800,000].

3 0
3 years ago
you expect it to pay a dividend of $3 in 1 year, $4.25 in 2 years, and $6.00 in 3 years. You expect to sell the stock for $100 i
Rus_ich [418]

Answer:

$81.52

Explanation:

In this question, we are asked to state the price to pay for a stock at this present day.

To calculate this, we compute it mathematically.

Mathematically, we have;

dividend/(1+required return rate)^year

we then add together

we have

=3/(1.12) + 4.25/(1.12)^2 + 6/(1.12)^3 + 100/(1.12)^3 = 81.52

7 0
3 years ago
What transactions are included in income from continuing operations? briefly explain why it is important to segregate income fro
Advocard [28]
<span>Transactions that are included in continuing operations are income from revenue,expenses, gains and losses.These are the components that will probably continue in future periods. It is important to segregate income from continuing operations from other transactions that affecting net income, because the information will help analysts predicts future cash flows.</span>
3 0
3 years ago
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