Answer: 1.66
Explanation:
Based on the information given in the question, the beta of the stock will be calculated as follows:
Expected return = 16.2%
Market return = 11.2%
Inflation rate = 3.1%
Risk-free rate of return = 3.6%
We should note that:
Expected return = risk-free rate + Beta × (market rate- risk-free rate)
Therefore,
16.2% = 3.6% + Beta × (11.2% - 3.6%)
16.2% = 3.6% + Beta × 7.6%
16.2% - 3.6% = Beta × 7.6%
12.6% = Beta × 7.6%
Beta = 12.6% / 7.6%
Beta = 1.66
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Answer:
(a) update depreciation for 2018
Debit ; Depreciation $10,800
Credit Accumulated Depreciation $10,800
(b) record the sale
Debit : Cash $12,960
Debit : Accumulated Depreciation $62,100
Credit : Profit and Loss $10,260
Credit : Equipment at Cost $64,800
Explanation:
(a) update depreciation for 2018
Recognize deprecation
(b) record the sale
Recognize proceeds from sale and profit or loss from sale
Answer:
Rate of return is 16.11%
Explanation:
Dividend Valuation method is used to value the stock price of a company based on the dividend paid, its growth rate and rate of return. The price is calculated by calculating present value of future dividend payment.
Formula to calculate the value of stock
Price = Dividend / ( Rate or return - growth rate )
$54 = $6 / ( Rate or return - 5% )
Rate or return - 0.05 = $6 / $54
Rate or return - 0.05 = 0.1111
Rate or return = 0.05 + 0.1111
Rate or return = 01611
Rate or return = 16.11%
Fixed Costs: 420,000
Variable Costs: 65%
Your BREAK-EVEN Point is: $1,200,000 USD or 600 Units @ $200 Each
