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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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How much can Azco Autosystems, Inc., afford to spend on an energy management system if the software will save the company $21,30
ivann1987 [24]

The amount that that  Azco Autosystems, Inc.,  can afford to spend on an energy management system is $80,744.

<h3>Present value</h3>

Using this formula

Present Value = A(P/A, 10%, 5)

Where:

A=$21,300

(P/A, 10%, 5)=3.79079

Let plug in the formula

Present Value = 21,300 (P/A, 10%,5)

Present Value = 21,300 (3.79079)

Present Value =80,743.8

Present Value = $80,744 (Approximately)

Inconclusion the amount that that  Azco Autosystems, Inc.,  can afford to spend on an energy management system is $80,744.

Learn more about present value here:brainly.com/question/15904086

4 0
2 years ago
What do capital controls prevent?
ch4aika [34]

Answer:

What do capital controls prevent?

Speculators from rushing into and out of a country's market and

disrupting its economy.

Explanation:

Capital control entails when a body that regulates money in a country controls the cash inflow and outflow

6 0
3 years ago
Read 2 more answers
Knowledge Check 01 Addison Corporation is considering the purchase of equipment that would increase sales revenues by $250,000 p
Flauer [41]

Answer:

C. 25.5%

Explanation:

Net operating cashflow = (250,000 - 100,000) = 150,000; This is a recurring cashflow; the PMT

Cost of equipment; the PV = 400,000

Next, calculate the rate of return  using Net operating cashflow per year and the equipment cost. You can do this with a financial calculator;

N =5

PMT = 150,000

FV = 0

PV = -400,000

then CPT I/Y = 25.41%

Therefore the return is closest to 25.5%

8 0
3 years ago
PLEASE ANSWER ASAP WILL GIVE BRAINLIEST AN LOTSSSS OF POINTS
Luba_88 [7]

Explanation:

1a)\frac{(2000 \times 10 \times 5) + (3000 \times 5 \times 6.5)}{100 + 100 }  \\  = \frac{100000 + 97500}{100 + 100}  \\  = 1000 + 975 + 1500 + 800 \\ 4275

7 0
2 years ago
Read 2 more answers
Philadelphia Company has the following information for March: Sales $486,599 Variable cost of goods sold 205,621 Fixed manufactu
egoroff_w [7]

Answer:

Manufacturing margin is $203,253

Contribution margin is $230,357

Net income $118,547

Explanation:

Manufacturing margin is the sales revenue minus manufacturing costs

Sales revenue                           $486,599

Cost of goods sold                  ($205,621)

fixed manufacturing cost         ($77,725)

manufacturing margin            $203,253

Contribution margin is sales revenue minus variable costs:

Sales revenue                           $486,599

Cost of goods sold                  ($205,621)

variable selling & admin          ($50,621)

contribution      margin            $230,357

Income is the sales revenue minus all costs incurred:

Sales revenue                           $486,599

Cost of goods sold                  ($205,621)

fixed manufacturing cost         ($77,725)

Variable selling & admin          ($50,621)

Fixed selling & admin              ($34,085)

Net income                             $118,547

6 0
3 years ago
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