Answer:
Risk-free rate decreases
Explanation:
The CAPM formula for calculating cost of equity requires one to know the value of 3 pieces of information only:
1. the market rate of return,
2. the beta value
3. the risk-free rate.
Ra = Rrf + [Ba∗(Rm−Rrf)]
where:
Ra=Cost of Equity
Rrf = Risk-Free Rate
Ba = Beta
Rm=Market Rate of Return
From the formula
Ra = Rrf + [1.2∗(Rm−Rrf)]
Ra = Rrf + 1.2Rm - 1.2Rrf
From Ra = 1.2Rm -0.2Rrf
From the expression above, it can be seen that the lower the value of Rrf (Risk-Free rate), the higher the value of Ra.
Answer:
Transnational
Explanation:
A transnational procedure is a lot of arranged activities characterised by an organisation to have tasks in business sectors abroad. This term applies to the strategies and structures that enable a firm to start and keep up capacities in outside nations while protecting focal coordination at one explicit area. This particular strategy is applied by the company to achieve economist of scale and economise.
Answer:
$304,500
Explanation:
Interest payable on December 31, year 1 = $290,000 * 5%
Interest payable on December 31, year 1 = $14,500
Total amount of liabilities to be reported on the Balance Sheet, year 1:
= $290,000 + $14,500
= $304,500
So, the total amount of liabilities related to these bonds that will be reported on the balance sheet at December 31, Year 1 is $304,500.
Answer:
A Blank Endorsement is - an endorsement consisting only of the endorser's signature. * If the blank endorsed check is lost or stolen, the check can be cashed by anyone who has it, so only use it when it is ready to be directly cashed or deposited into the bank. SPECIAL ENDORSEMENT.
Explanation:
Answer:
5.75%
Explanation:
the required rate of return for a preferred stock can be calculated by dividing the preferred dividend by the current market price:
- required rate of return = $5.35 / $93 = 5.75%
The preferred dividend is fixed, but the market price varies depending on the required rate of return.