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12345 [234]
3 years ago
12

The risk-free rate is 4%, the market risk premium is 8%, and the market return is 12%. Stock Y's beta is 1.85 and the standard d

eviation of its returns is 60%. What should be the stock's expected rate of return to make the investor indifferent toward buying or selling the stock?
Business
1 answer:
Snowcat [4.5K]3 years ago
6 0

Answer:

18.80%

Explanation:

Data given

Risk free rate = 4%

Beta = 1.85

Market return = 12%

The computation of rate of return is shown below:-

Using CAPM

Rate of Return = Risk free rate + Beta × (Market return- Risk free rate)

= 4% + 1.85 × (12% - 4%)

= 4% + 1.85 × 8%

= 4% + 14.8%

= 18.80%

Therefore for computing the rate of return we simply applied the above formula.

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Sphinxa [80]

Answer: The amount of bad debt expense the company would record would be $3,470.

Explanation: Bad debt expense is an estimate of accounts receivable that is deemed as uncollectible while allowance for doubtful accounts is a balance sheet allowance account that warehouses the total balance of accounts receivable that is deemed irrecoverable.

In this scenario, Simple Co. estimated, using the aging method, that the allowance for doubtful accounts is $3,800. However, it had a credit balance of $330 in the same account. The reinstate the allowance account to $3,800, $3,470 has to be adjusted for by debiting bad debt expense and crediting allowance for doubtful account.

3 0
3 years ago
N the united states, the control of the money supply is the responsibility of the:____.
lutik1710 [3]

N the united states, the control of the money supply is the responsibility of the Federal Reserve System.

The Federal Reserve System is the central banking system of the United States. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of financial crises led to a desire for centralized control of the monetary system to alleviate crises. financial crisis.

The Federal Reserve System provides the country with a secure, flexible, and stable monetary and financial system. The main functions of the Fed include conducting national monetary policy, supervising and regulating banks, maintaining financial stability, and providing banking services.

Learn more about Federal Reserve System here: brainly.com/question/7798250

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8 0
1 year ago
June Inc. issued 9,000 nonqualified stock options valued at $27,000. Each option entitles the holder to purchase one share of st
Vilka [71]

Answer:

The right solution is "$3,000 favorable".

Explanation:

The standard taxation deduction throughout the year 2019 is nothing more than the differentiation seen between strike amount of $9 as well as the market value of the company stock of $5.

Besides book specific reason, calculated by multiplying the total number of possibilities used:

⇒ (9-5)\times 3000

⇒ 4\times 3000

⇒ 12000

The manuscript deduction seems to be the valuation of the relevant guidelines throughout the year 2019:

⇒ \frac{1}{3}\times 27000

⇒ 9000

Therefore the large amounts book deduction of 3000 seems to be definitely favorable.

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3 years ago
If making your family and friends a priority is important to you, you value
Kay [80]

Answer:

Relationships.

Explanation:

We maintain ourselves worth by trying to please excel meditate and even control or change ourselves to be closer to the people we love most.

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2 years ago
Kirk McCoy is district sales manager for the Jimmy Dean division
arlik [135]

Answer: centralized

Explanation:

Based on the information given in the question, we can infer that McCoy operates a centralized department.

This is a centralized department because McCoy takes the decisions in the organization. In a centralized department, the organizational structure is such that the power regarding the decision is confined to top management, while the followers just follow the instructions

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3 years ago
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