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
mrs_skeptik [129]
3 years ago
6

Piedmont Hotels is an all-equity company. Its stock has a beta of 1.23. The market risk premium is 6.9 percent and the risk-free

rate is 2.7 percent. The company is considering a project that it considers riskier than its current operations so it wants to apply an adjustment of 1.9 percent to the project's discount rate. What should the firm set as the required rate of return for the project
Business
1 answer:
never [62]3 years ago
5 0

Answer:

The required rate of return for the project will be 13.087%

Explanation:

To calculate the required rate of return for the project, we must first calculate the required rate of return for the firm's equity. The required rate of return can be calculated using the CAPM or Capital Asset Pricing Model equation. The formula for required rate of return (r) under this model is,

r = rRf + Beta * rpM

Where,

  • rRF is the risk free rate
  • rpM is the risk premium on market

r = 0.027 + 1.23 * 0.069

r = 0.11187 or 11.187%

The discount rate that is usually used for an all equity firm is its required rate of return. Thus, the required rate of return for the project will be,

r = 0.11187 +  0.019

r = 0.13087 or 13.087%

You might be interested in
Performance evaluations for the purpose of determining compensation and special rewards should focus on?
Rainbow [258]

Performance evaluations for the purpose of determining compensation and special rewards should focus on activities and results related to the salesperson's current job and situation.

Performance Evaluation is defined as a formal and productive procedure to measure an employee's work and results based on their job responsibilities. Although the specific criteria depend on the characteristics of a particular selling situation, comprehensive evaluations of salesperson performance require that four dimensions be addressed: behavioral, professional development, results, and profitability criteria. System of review and evaluation of job performance. Assesses accomplishments and designs plans for development. Purposes for Performance Appraisal. Performance evaluations should always be based on the actual job description.

To learn more about Performance evaluations here

brainly.com/question/27548455

#SPJ4

7 0
2 years ago
State and explain ways to set-up business in domestic market?
Murljashka [212]

Answer:

Explanation:Buy products in bulk to sell.

Sell homemade products you make yourself.

Start a dropshipping store.

Start a print-on-demand store.

Sell your service or expertise.

Productize your service or expertise.

Grow an audience you can monetize.

Buy an existing ecommerce business.

3 0
3 years ago
Name 3 outside financing sources
sukhopar [10]

Answer and explanation:

In the corporate world, outside or external financing resources refer to all the sources from where a business can obtain the necessary capital to handle its operations without using the firm's assets. Common examples of external financing resources are:

  • Venture Capitals:<em> funding performed at an initial stage of companies after making research on the market and the company. </em>
  • Term loans:<em> provided by financial institutions that profit from the interest rate established in the loan or assets as collateral in case of payment failure. </em>
  • Debt Factoring:<em> short-term financing in which an organization sells its account receivables at a discount.</em>
6 0
3 years ago
The cost of goods for Mandy Manufacturing Company flow through an assembly and a finishing department before being transferred t
laila [671]

Answer:

Option (D) is correct.

Explanation:

Given that,

Beginning work in process = $4,000

Ending work in process in finishing department = $6,000

Cost transferred = $47,000

Direct material = $15,000

Direct labor  = $46,000

Overhead  = $22,000

Cost incurred in finishing department:

= Beginning work in process + Cost transferred + Direct material + Direct labor + Overhead

= $4,000 + $47,000 + $15,000 + $46,000 + $22,000

= $134,000

Cost of goods transferred to the Finished Goods Inventory account:

= Cost incurred in finishing - Ending work in process

= $134,000 - $6,000

= $128,000

5 0
4 years ago
2. Which of the following is most likely to raise a significant ethical issue? (select one).
zhannawk [14.2K]

Answer:

A Business School student looking at changes in structures of Small and Medium Sized Enterprises (SMEs) using publicly available information

Explanation:

5 0
3 years ago
Other questions:
  • In order to sell a product at a profit, the product must be priced higher than the total cost to build the unit, plus period exp
    12·1 answer
  • Choose an advertisement that you found to be especially memorable. Describe the advertisement and explain how effective it is. D
    7·1 answer
  • When you are willing to pay $5 for a hamburger but you pay $4 for it, your consumer surplus for the hamburger is:?
    11·1 answer
  • Sharon Tate has a mutual fund and she has all dividend income and capital gains income used to purchase additional shares in her
    11·2 answers
  • While conducting an audit, Larson Associates, CPAs, failed to detect material misstatements included in its client's financial s
    9·1 answer
  • Which of the following statements about the Federal Application for Student Aid (FAFSA) is TRUE? AYou can only apply online. BTh
    8·2 answers
  • Carrie D's has 6 million shares of common stock outstanding, 2 million shares of preferred stock outstanding, and 10 thousand bo
    13·1 answer
  • Manufacturing cost data for Orlando Company, which uses a job order cost system, are presented below. Indicate the missing amoun
    10·1 answer
  • The following account appears in the ledger prior to recognizing the jobs completed in January:
    15·1 answer
  • A yield can be paid in the form of?
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!