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3 years ago

A company's beta (from the CAPM) is affected by its capital structure. a. True b. False

Business

1 answer:

liberstina [14]3 years ago

3 0

Answer:

True

Explanation:

We know that

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

where,

The Market rate of return - Risk-free rate of return) is also known as the market risk premium and the same is applied.

Plus we know that the capital structure is composed of debt and equity. If the debt is increasing, the market risk is also increased, and therefore the volatility is also increasing.

The beta is the volatility which can affect due to market movements so it automatically affect the capital structure

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If people have a high degree of _______ one is more likely to want to stay with their current company.

IrinaVladis [17]

If people have a high degree of organizational commitment one is more likely to want to stay with their current company.

Organizational commitment means the connection or the bond that the employees have with their organization or the employer. It all depends upon their psychology that more attachment they have with their employer or the organization more will they want to stay in it.

It defines different variables such as the job performance of the employees, turnover of the company or the employee employer relationship.

A model of commitment was given by Meyer and Allen in which they defined three types of commitment:

Affective commitment

Continuance commitment

Normative commitment.

To know more about commitment here:

brainly.com/question/24912989

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8 0

1 year ago

Larson Manufacturing is considering purchasing a new injection-molding machine for $360 comma 000360,000 to expand its product

Anastaziya [24]

Answer:

If I bougth the Machine at 14% interest.

This purchase is not justified

Depreciation expenses and credit interest are greater than the income generated

Explanation:

Machine 360000

Adittional cost 20000

Final Cost 380000

Salvage Value 73000

Machine value for depreciation 307000

year 1 307000 61400 245600

year 2 245600 61400 184200

year 3 184200 61400 122800

year 4 122800 61400 61400

year 5 61400 61400 0

Period Payment Capital Interest Loan

360000

1 104.862 54.462 50.400 305.538

2 104.862 62.087 42.775 243.451

3 104.862 70.779 34.083 172.672

4 104.862 80.688 24.174 91.984

5 104.862 91.984 12.878 0

Depreciation 307000

Interes 164.310

Expenses 471.310

Revenue 430.000

8 0

3 years ago

This refers to dividing responsibility among specific units or departments.

Julli [10]

I think this could be division of labour.

6 0

3 years ago

Compared with a career , a job ?

Margaret [11]

A job is just a short term thing to get cash and build up experience . a career is a long term pursuit of lifelong ambition . a career you enjoy the rest of your life

5 0

3 years ago

Read 2 more answers

Suppose you know a company's stock currently sells for $90 per share and the required return on the stock is 8 percent. You also

maks197457 [2]

Answer: $3.46

Explanation:

Given the following :

Current share price (P0) = $90 per share

Required return on stock= 8%

total return on the stock is evenly divided between a capital gains yield and a dividend yield ;

Therefore, Required return on stock= 8% ;

4% capital gain yield + 4% Dividend yield = 8%

Growth rate = 4% = 4/ 100 = 0.04

D1 = D0(1 + g)

D1 = value of next year's Dividend

D0 = current Dividend yield

g = Constant growth rate

D1 = current stock price * g

D1 = 90 * 0.04 = 3.6

D1 = D0(1 + g)

D0 = D1 / (1+g)

D0 = 3.6 / (1+ 0.04)

D0 = 3.6 / 1.04

D0 = $3.46

8 0

3 years ago