The concept that motivation can be understood based on a hierarchy of human needs was first introduced by

The Rhaegel Corporation’s common stock has a beta of 1.2. If the risk-free rate is 4.3 percent and the expected return on the ma

alexira [117]

Answer:

Cost of equity = 14.74%

Explanation:

The capital asset pricing model is a risk-based model for estimating the return on a stock..

Here, the return on equity is dependent on the level of reaction of the the equity to changes in the return on a market portfolio. These changes are captured as systematic risk.

Systematic risks are those which affect all economic actors in the market, they include factors like changes in interest rate, inflation, etc. The magnitude by which a stock is affected by systematic risk is measured by beta.

Under CAPM,

E(r)= Rf + β(Rm-Rf)

E(r)- cost of equity , Rf-risk-free rate , β= Beta, Rm= Return on market.

Using this model, we can work out the value of beta as follows:

β-1.2 Rf- 4.3%, Rm = 13%

E(r) = 4.3% + 1.2 × (13 - 4.3)%=14.74 %

Expected return = 14.74 %

Cost of equity = 14.74%

8 0

3 years ago

He vertical hierarchy is also known as _____.

wolverine [178]

Another term for the word "vertical hierarchy" is "the chain of command." A vertical hierarchy is an organisational structure that looks like a pyramid. Located at the topmost portion of this "pyramid" are the executives of a company, and below it are the supervisors in different departments and divisions.

3 0

4 years ago

What action is key to success in online learning?

BabaBlast [244]

Studying. Never stop studying, going over your work twice, and double checking.

3 0

3 years ago

Read 2 more answers

Springer Anderson Gymnastics prepared its annual financial statements dated December 31. The company reported its inventory usin

stira [4]

Answer:

Ending Inventory Net Realisable Value or LCM is $ 14,000

Net Income Net Realisable Value or LCM is $ 11,900

Explanation:

Purchase Cost Replacement Cost per

Item Quantity Per Unit Total Unit Total Cost NRV

A 1,500 $ 3 4,500 $ 4 $ 4500 $4500

B 750 4 3,000 2 $1500 $ 1500

C 3,500 2 7,000 1 $3500 $ 3500

<u>D 1,500 5 7,500 3 $ 4500 </u><u> $ 4500 </u>

$ 14000

Ending Inventory $ 22,000

Income Statement

Sales Revenue $ 140,000

Cost of Goods Sold

Beginning Inventory $ 15,000

Purchases 91,000 Goods

Available for Sale 106,000

Ending Inventory 14,000 Applying LCM/NRV

Cost of Goods Sold 92,000

Gross Profit 48,000

Operating Expenses 31,000

Income from Operations 17,000

Income Tax Expense (30%) 5,100

Net Income $ 11,900

4 0

3 years ago

Why would a decrease in a company's stock value make them nervous, even though the decrease might be small?

Gemiola [76]

A decrease in a company stock value will make the company nervous even if the decrease is small due to these following scenarios.

1) They don't have a stockpile of cash.
2) It will become a problem for companies that relies on outside financing to fund their operations. Decrease in stock value will make their creditors wary in letting them borrow more money.
3) Many stock companies use stock options as part of their employee benefits. If the value decreases, then employees will not be encouraged to stay on with the company.
4) Continuous decrease in stock value will result to disgruntled stakeholders which may prompt dismissal of the CEO and his/her team and replacing them with more capable people..

3 0

4 years ago