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Tpy6a [65]
3 years ago
15

The Delta Co. owns retail stores that market home building supplies.​ Largo, Inc. builds single family homes in residential deve

lopments. Delta has a beta of 1.22 and Largo has a beta of 1.34. The riskminus free rate of return is 4 percent and the market risk premium is 6.5 percent. What should Delta use as their cost of equity if they decide to purchase some land and create a new residential​ community?
Business
1 answer:
cupoosta [38]3 years ago
4 0

Answer:

12.71%

Explanation:

In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

= 4% + 1.34 × 6.5%

= 4% + 8.71%

= 12.71%

The (Market rate of return - Risk-free rate of return)  is also called market risk premium and the same is used in the computation part. We ignored the bets of Delta

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As it applies to corporations, employee-owner separation means that many employees
Kruka [31]

As it applies to corporations, employee-owner separation means that many employees can be separated from organization as a result of resignation, removal, death, permanent incapacity, discharge or retirement and they as employee are not stockholders of the company for which they work.

For better understanding, lets explain ownership and control in firms

  • Separation of Ownership and Control in firm is done by Shareholders. They hire managers to manage the firm on their behalf. Employee only work for shareholders. Employees can be separated from organization as a result of resignation, removal, death, permanent incapacity, discharge or retirement

From the above, we can therefore say that the answer that as it applies to corporations, employee-owner separation means that many employees can be separated from organization as a result of resignation, removal, death, permanent incapacity, discharge or retirement and they as employee are not stockholders of the company for which they work is true

Learn more about separation from

brainly.com/question/23883384

4 0
3 years ago
After years of using a mass marketing strategy, Digital Print Shops has responded to new competition from national chain stores
Kisachek [45]

Answer:

The answer to this question is B. Niche marketing

Explanation:

Niche marketing involves identifying and exploiting a small segment of a larger market by developing products to suit it. identifying and exploiting a small segment of a larger market by developing products to suit it.  

A niche market cater for  the unique demands that aren't being addressed by mainstream providers.  Organisations  pursue niche markets as a way to build loyalty and revenue with a largely-overlooked audience.

We can therefore conclude from the explanation in the questions as regards the activities of Digital Print Shops that it using a Niche marketing strategy

Hence the answer is B. Niche marketing

4 0
3 years ago
Read 2 more answers
Which of the following is a disadvantage of equity capital?
Blababa [14]
Norge answer ishhhhhnxmjdnshei
4 0
3 years ago
Your boss leaves you a note, asking you to determine the present value of a $1,200,000 payment to be made in six years assuming
shtirl [24]

Answer:

so value of the mistake is $311685.71

Explanation:

given data

present value = $1,200,000

time = 6 year

discount rate = 18%

discount rate = 8%

to find out

What is the dollar value of the mistake

solution

we get here present value that is express as for both rate that is

present value = \frac{FV}{(1+r)^t}

put here value

present value =  \frac{1200000}{(1+0.18)^6}

present value 1 = $444517.85

and

present value =  \frac{1200000}{(1+0.08)^6}

present value 2 = $756203.55

so

difference is $756203.55 - $444517.85

difference is = $311685.71

so value of the mistake is $311685.71

7 0
3 years ago
Hurricane Industries had a net income of $129,650 and paid 40 percent of this amount to shareholders in dividends. During the ye
oksano4ka [1.4K]

Answer:

a. 28390

Explanation:

Stockholders cash flow is the net of cash inflows from stockholders and cash outflows to stockholders.

Net Income = $129,650

Payout Ratio = 40%

Cash outflow

Amount of Dividend Paid = $129,650 x 40% = $51,860

Cash Inflow

Common stock issue = $80,250

Net Stockholder's cash flow = $80,250 - $51,860

Net Stockholder's cash flow = $28,390

8 0
3 years ago
Read 2 more answers
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