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Eva8 [605]
3 years ago
12

The stock is currently selling for $15.25 per share, and its noncallable $1,000.00 par value, 20-year, 9.00% bonds with semiannu

al payments are selling for $930.41. The beta is 1.22, the yield on a 6-month Treasury bill is 3.50%, and the yield on a 20-year Treasury bond is 5.50%. The required return on the stock market is 11.50%, but the market has had an average annual return of 14.50% during the past 5 years. The firm's tax rate is 25%. Refer to Exhibit 10.1. Based on the CAPM, what is the firm's cost of equity?
Business
1 answer:
ANTONII [103]3 years ago
7 0

Answer:

12.8%

Explanation:

Ra=Rf+(Rm-Rf)*Ba

Ra=?

Rf=5.5%

Rm=11.5%

Ba=1.22

Ra=5.5%+(11.5%-5.5%)*1.22

Ra=12.8%

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GarryVolchara [31]

Answer:

intermediate goods or consumer goods

Explanation:

8 0
2 years ago
On January 1, 2013, Warfield Co. purchased a $600,000 machine, with a five-year useful life and no salvage value. The machine wa
natulia [17]

Answer:

$0

Explanation:

In the case when the depreciation method is changed so it should be treated propectively. The past year depreciation amount remains the same. So the starting year of change having no difference should be produced but the beginning to the closing year of change the deferred tax liability should be recorded the difference occured in the future that lies between the book and tax depreciation

So, it should be zero

4 0
3 years ago
Given the mixed cost formula, Y = $16,000 + $3.40X, total cost for an activity level of 4,000 units would be:
Katyanochek1 [597]

Answer:

D) $29,600

Explanation:

The mixed cost formula gives the relationship between the cost and the level of activities. It shows the cost as a function of the activity level.

The formula also shows that the cost is made up of a fixed element ($16,000) and a variable element ($3,40X).

Hence at an activity level of 4000 units,

Y = $16,000 + $3.40(4000)

= $29,600

7 0
3 years ago
Michelle is attending a university where tuition for one year costs $17,300. She has a scholarship worth $5,000 per year. She ea
Dmitry_Shevchenko [17]

Answer:

$41,400

Explanation:

Tuition will increase by $500 each year

Year 1 tuition = $17,300

Year 2 tuition = $17,800

Year 3 tuition = $18,300

Year 4 tuition = $18,800

Total = $72,200

Scholarship per year = $5000

Total scholarship for 4 years = 4 * $5000

= $20,000

Earnings per year = $2,700

Total earnings for four years = 4 * $2,700

= $10,800

She plans to take out a loan to cover the remaining tuition costs

Loan = Total tuition - (Total scholarship for 4 years + Total earnings for four years)

= $72,200 - ( $20,000 + $10,800)

= 72,200 - (30,800)

= 72,200 - 30,800

= 41,400

Loan = $41,400

Michelle need to borrow $41,400

6 0
3 years ago
Explain how a consumer’s place of residence has an especially large impact on their purchase of sports and entertainment commodi
ElenaW [278]

Answer:

Concept: Business digression

  • Lets assume you live in Los Angeles CA
  • LA houses the Lakers, dodgers, and so many more big brand teams.
  1. A consumer which is defined as any person in a free and open market to openly trade their wealth and income in return for an item or service.
  2. Residence defined as the area that surrounded the immediate perimeter of the said consumer.
  3. Hence, by the principle of <u>socialization</u><u> </u>people are more inclined to buy sports gear to represent their teams and inclined to participate in consumer purchases based on their peers.
  4. It becomes the "lifestyle" and "ideal" personalities in a place such as LA and this inherently drives up sales of sports and entertainment commodities.
  5. The location, or residence directly <u>exposes</u> the consumer to the products in a market where it "hot" and in style/demand.
  6. Rate brainlist & give positive feedback.
8 0
3 years ago
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