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ololo11 [35]
3 years ago
8

Polly Khan is trying to calculate the current market rate given the following information: Investor’s have been requiring a 12%

annual return on Builtrite’s stock which has a beta of 2.0 and the current risk-free rate is 4%. What is the current market rate?
Business
1 answer:
Travka [436]3 years ago
8 0

Answer:

The current market rate is 8%

Explanation:

The market rate is the return on market or the market portfolio. To calculate the market rate (rM) we will use the CAPM equation which is used to calculate the required rate of return on a stock or portfolio. The formula for required rate of return under CAPM is,

r = rRF + Beta * (rM - rRF)

Where,

  • rRF is the risk free rate
  • rM is the market rate

We already know the value of r, rRF and Beta. We will input these values in the above equation to calculate the market rate.

0.12 = 0.04 + 2 * (rM - 0.04)

0.12 - 0.04 = 2 * rM - 0.08

0.08 + 0.08 = 2 * rM

0.16 / 2 = rM

rM = 0.08 or 8%

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Answer: <em><u>Cash to be distributed to  Harding = $ 17000,  Jones = $ 3000 </u></em>

Explanation:

It has been indicated that the ($9,000) deficit will be covered with a forthcoming contribution

∴ The Remaining Capital Balance is = (24000 + 24000) = $48000

∵Total cash Available = $20000

Loss = 48000 - 20000 =  $ 28000

Loss will be shared between Harding & Jones in ratio = 16:48

∴  Harding Capital balance = \frac{(24000 - 28000)\times16}{16+48} = $ 17000

∴ Jones Capital balance =  \frac{(24000 - 28000)\times48}{16+48} = $ 3000

Cash will be Distributed in their capital balance ratio

Therefore,

<u><em>Cash to be distributed to  Harding = $ 17000,  Jones = $ 3000 </em></u>

7 0
3 years ago
Ann Chovies, owner of the Perfect Pasta Pizza Parlor, uses 20 pounds of pepperoni each day in preparing pizzas. Order costs for
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Answer: 40 pounds

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Given the following :

Ordering cost = $10 / order

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Cost of pepperoni = $3 per pound

Daily demand = 20 pounds

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Order quantity / 2

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3 years ago
According to circus founder P. T. Barnum, what happens without publicity?
almond37 [142]

Answer:

<em>"A terrible thing happens without publicity...</em><em>nothing</em><em>!"</em>

3 0
3 years ago
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mars1129 [50]

Finding the right place to be a waitress at could be really good :) But if you're not too inclined to rely mostly on tips here's a list of good places that have some benefits (free food, flexible schedule, etc.)


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Poverty is shown as a deficiency of money and profitable resources to support long-term survival.

Hunger and starvation, restricted access to education and other basic services, social prejudice and exclusion, and a disinterest in decision-making are all examples of its expressions.

Poverty is a cause of social dissatisfaction and political upheaval; economic development has lowered the amount of people living in poverty.

Therefore, the poverty is a very big problem than the economic problem.

Learn more about the poverty, refer to:

brainly.com/question/10645433

#SPJ1

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