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geniusboy [140]
4 years ago
10

Porter Plumbing's stock had a required return of 11.75% last year, when the risk-free rate was 5.50% and the market risk premium

was 4.75%. Then an increase in investor risk aversion caused the market risk premium to rise by 2%. The risk-free rate and the firm's beta remain unchanged. What is the company's new required rate of return? (Hint: First calculate the beta, then find the required return.)
Business
1 answer:
Anni [7]4 years ago
7 0

Answer:

The answer is: Porter Plumbing's stock new rate of return is 14.38%

Explanation:

First we calculate beta:

beta = (stock's rate of return - risk free rate) / market rate of return

beta = 6.25% / 4.75% = 1.32

If beta remained the same (1.32% and the market rate of return increased by 2%, then to find the new value for Porter's stock (P):

1.32 = (P - risk free rate) / 6.75%    

P - risk free rate = 1.32 x 6.75% = 8.88%

P = 8.88% + risk free rate            

P = 8.88% + 5.50% = 14.38%    

​

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if you have a successfully crowdfunded product and you know you are going to miss your advertised ship date, what should you do?
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If you have a successfully crowdfunded product and you know you are going to miss your advertised ship date, what you should do is: C) Be honest; alert your backers and notify others through the crowdfunding site.

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In this scenario, the best thing to do is being honest, especially by alerting your backers, guarantors, and all of the people who provided the fund through the crowdfunding site.

Read more on a crowdfunding here: brainly.com/question/21940014

#SPJ1

Complete Question:

If you have a successfully crowdfunded product and you know you are going to miss your advertised ship date, what should you do?

A)Do nothing.

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D)Shift the blame to someone else (manufacturers, distributors, suppliers, etc.).

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Deep mines has 14 million shares of common stock outstanding with a beta of 1.15 and a market price of $42 a share. there are 90
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= 15,000 units × 4 hours

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= Standard hours allowed for actual production × Standard fixed overhead rate

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