1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
storchak [24]
3 years ago
6

The risk-free rate of return is 3% and the expected return on the market portfolio is 14%. Oklahoma Oilco has a beta of 2.0 and

a standard deviation of returns of 26%. Oilco's marginal tax rate is 35%. Analysts expect Oilco's net income to grow by 12% per year for the next 5 years. Using the capital asset pricing model, what is Oklahoma Oilco's cost of retained earnings?A) 25.0% B) 22.8% C) 21.2% D) 18.6%
Business
1 answer:
Monica [59]3 years ago
8 0

Answer:

25%

Explanation:

Data provided

Risk free return = 3%

Beta = 2

Expected return on the market portfolio = 14%

Risk-free rate of return = 3%

The computation of cost of retained earnings is shown below:-

Cost of retained earnings = Risk free return + Beta × Risk premium

=  3% + 2 × (14% - 3%)

=  3% + 2 × 11%

=  3% + 0.22

= 25%

Therefore, for computing the cost of retained earning we simply applied the above formula.

You might be interested in
TRUE OR FALSE FOR BRAINLIEST ANSWER, I'LL REPORT IF WRONG When one party substantially performs, the other can demand full perfo
Luda [366]

Answer:

true

Explanation:

3 0
2 years ago
You normally stay at home on Wednesday nights and study. However, next Wednesday night, your best friend is having his big 21st
nalin [4]

Answer:

My answer would be don't go, Since we are almost in the red positive for Corona, U might have a chance of catching it from her or the people at her party. On the other hand, u can do a virtual party over the phone/laptop. I understand it's difficult to avoid your bestfriend because of Corona, but technically it's for your own good. If it makes you feel better, I had to miss my Bestfriend B-Day because I was scared to get Corona.

Explanation:

4 0
3 years ago
Read 2 more answers
A company had a choice between Project X and Project Y. The net present value of Project X is $1,000,000, and the net present va
vekshin1

Answer:

The opportunity cost of that decision is - $250,000

Explanation:

For computing the opportunity cost, we have to use the formula of opportunity cost which is shown below:

= Return of project which is not chosen - the return of a chosen project

= $750,000 - $1,000,000

= - $250,000

Since in the question, it is given that the chosen project is X so we write the project X amount in the formula and the not chosen project of-course is Y.

Hence, the opportunity cost of that decision is - $250,000

8 0
3 years ago
Good name for an online pet store?
Vesna [10]
Home of pets !!!
Hope it works!!!
3 0
2 years ago
Read 2 more answers
[The following information applies to the questions displayed below.] Laser Delivery Services, Inc. (LDS), was incorporated Janu
Rasek [7]

Answer:

a.

Date          Account Details                                  Debit                       Credit

                 Cash                                                $27,000

                 Common Stock                                                                 $27,000

b.

Date          Account Details                                  Debit                       Credit

                 Land                                                 $9,000

                  Notes Payable                                                                  $9,000  

c.

Date          Account Details                                  Debit                       Credit

                 Vehicles                                           $18,000

                 Cash                                                                                 $2,000

                 Notes Payable                                                                 $16,000

d.

Date          Account Details                                  Debit                       Credit

                 Vehicles                                               $800

                 Cash                                                                                    $800

e. This does not require a journal entry as it is a personal transaction.

3 0
3 years ago
Other questions:
  • if you want to be able to compare different investments , which piece of information is the most helpful
    5·1 answer
  • Choose the statement that is incorrect. A. Search activity occurs only in markets where there is a shortage. B. The time spent l
    10·1 answer
  • A warehouse located in an urban area had been vacant for several years. Although the warehouse was not being used, the owner of
    9·1 answer
  • Determine the prior Year and Current Year common-size percents for cost of goods sold using net sales as the base.(5 thousands)
    14·1 answer
  • Who is affected negatively when a country’s currency is weak? Give domestic and foreign examples
    15·1 answer
  • g each collectible ship requires one pint of high-quality paint at a cost of $25 per pint. considering increasing the selling pr
    12·1 answer
  • Describe one way advertising has played a role in something you've purchased.
    15·2 answers
  • Dodson Company traded in a manual pressing machine for an automated pressing machine and gave $8,000 cash. The old machine cost
    13·1 answer
  • at the end of your car lease period, you intend to turn in the car, and you will not pay extra at that time based on the residua
    11·1 answer
  • The primary difference between the capital adequacy ratio (car) and the leverage ratio (lr) is?
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!