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
The basic purpose of the securities laws in the United States is to regulate the issuance of investment securities by:_____.A. P
geniusboy [140]

Answer:

B. Requiring disclosure of all relevant facts so that investors can make informed decisions.

Explanation:

The Securities and Exchange Commission (SEC) is a governmental agency saddled with the sole responsibility of regulating the securities or capital markets, as well as protecting investors in a country.

In the United States of America, the Securities and Exchange Commission (SEC) as an independent government agency was established under the Securities Act of 1933 and the Securities and Exchange Act of 1934 of the United States of America. It has the power to propose securities rules and regulations, and enforce federal securities law in the securities market.

The basic purpose of the securities laws in the United States is to regulate the issuance of investment securities by requiring disclosure of all relevant facts so that investors can make informed decisions.

Some of the forms to be filled as required by the United States of America, Securities and Exchange Commission (SEC) includes;

1. Form 10-K.

2. Form 10-Q.

3. Form 8-K.

7 0
2 years ago
Every person I have ever met says their favorite pizza is pepperoni pizza. Therefore, I can assume that everyone I ever meet wil
oksano4ka [1.4K]

Answer:

Inductive reasoning

Explanation:

This type of reasoning is considering generalization that is formed and based on some previous experiences and with that previous experiences the observation that is made is forming an inductive reasoning.

In this case, the person met many of them who says that their favorite pizza is pepperoni and then every time that someone say that they love pizza, this person will think of pepperoni pizza because of the previous experiences that caused those observations.

4 0
3 years ago
In a practical sense, the best size for a team is:A. between two and twenty-five members.B. five or fewer people.C. determined b
natali 33 [55]

C is the correct answer because it really varies depending on the game.

3 0
3 years ago
Research the different types of body language the people use in different cultures.
KiRa [710]

Answer:

Explanation:

Body language is an extremely important form of communication in every single culture, yet every culture has differences. For example...

Korean's tend to greet individuals with a bow. This is a form of showing respect as well as saying hello. Other cultures such as the Swiss tend to greet others with three cheek kisses.

Body language can be for many occasions such as Americans using the middle finger to show their dislike of someone. There's also Italian's closing their fingers together in form of a pinecone to show their distraught over something.

Body language has always been a way of expressing oneself and their emotions.

4 0
3 years ago
______ is a way to turn a company into a parent company with smaller retail outlets owned by independent operators.
Snowcat [4.5K]

Answer:

Franchising

Explanation:

just took the test and got 100%

3 0
3 years ago
Other questions:
  • Except in extreme cases, the evaluation of success or failure is ________ because time and cost to complete the project are ____
    6·1 answer
  • One form of online vandalism is __________, in which individuals interfere with or disrupt systems to protest the operations, po
    8·1 answer
  • Unemployment that is the result of deregulation, corporate downsizing, and the closure of military bases is best categorized as
    13·1 answer
  • At december 31, gill co. reported accounts receivable of $244,000 and an allowance for uncollectible accounts of $1,350 (credit)
    7·1 answer
  • Information System do not evolve over time true or false
    11·1 answer
  • The difference between the small business owner and the entrepreneur is that the entrepreneur:A. manages the businessB. files ta
    15·1 answer
  • You buy a lottery ticket to a lottery that costs $10 per ticket. There are only 100 tickets available to be sold in this lottery
    11·1 answer
  • A local university has a goal of raising $500,000 for an escrow account. Their fund-raising committee has committed to raising $
    12·1 answer
  • Poe Company is considering the purchase of new equipment costing $89,500. The projected annual cash inflows are $39,700, to be r
    8·1 answer
  • Shareholders in Frontier Communications were not pleased to learn that the company's market share had changed from 40 to 21 perc
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!