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Verizon [17]
3 years ago
7

Suppose that borrowing is restricted so that the zero-beta version of the CAPM holds. The expected return on the market portfoli

o is 14%, and on the zero-beta portfolio it is 7%. What is the expected return on a portfolio with a beta of 0.5?
Business
1 answer:
Delvig [45]3 years ago
4 0

Answer:

10.5%

Explanation:

In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below

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

where,

Risk free rate of return = 7%

Market rate of return = 14%

And, the beta is 0.5

So the expected return is

= 7% + 0.5 × (14% - 7%)

= 7% + 0.5 × 7%

= 7% + 3.5%

= 10.5%

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Universal Exports is expected to pay the following dividends over the next four years: $8, $4, $2, and $2. Afterwards the compan
tester [92]

Answer:

Maximum price to be paid for the stock = $12.43

Explanation:

The Dividend Valuation Model is a technique used to value the worth of an asset. According to this model, the worth of an asset is the sum of the present values of its future cash flows discounted at the required rate of return.

<em>Hence the value of the stock would be the present value of its future dividend discounted at 15%</em>

Year                                   PV of dividend

1                                          8  ×1.15^(-1)  

2                                           4 ×  1.15^(-2)  

3.                                              2 × 1.15^(-3)    

4                                                  2 × 1.15^(-4)    

PV of dividend =   (8 ×1.15^-1) +  (4 × 1.15^-2)  + (2 × 1.15^ -3) + (2× 1.15^-4) = 12.439

Maximum price to be paid for the stock = $12.43

4 0
3 years ago
Respond by (1) Identifying the type of syllogism below (Categorical, Disjunctive, Conditional) and (2) explain, in your own word
Darya [45]

The syllogism used is conditional, that is, it occurs through deductive reasoning, because if the minor premise is true, the minor premise will also be true.

<h3 /><h3>What is Conditional syllogism?</h3>

It is a type of syllogism widely used in everyday life, but the conclusion is not always true, because despite having two true premises, the conclusion can be false, because the argumentation is not always valid, as it does not directly represent the premises.

Therefore, despite being syllogisms that follow the pattern of "If" and "then" to express a logic, the conclusion will not always be true, as this type of syllogism can also be hypothetical.

Find out more about syllogism here:

brainly.com/question/361872

7 0
3 years ago
Fixed costs can be defined as costs thatGroup of answer choicesvary inversely with production.vary in proportion with production
Sholpan [36]

Answer: are incurred even if nothing is produced.

Explanation:

Fixed costs are referred to as the cost that doesn't vary with the production level. Even if the company doesn't produce anything, the fixed cost will still be incurred.

The fixed cost is different from the variable cost which is the cost that varies along with production. Examples of fixed cost include salaries, rental lease payments, salaries, etc.

8 0
3 years ago
Sorry wrong category......
sineoko [7]
? what is the question category ohhhhhhhhhh
3 0
3 years ago
All of the following statements are correct when referring to process costing except: _______
Nesterboy [21]

Answer:

The answer your looking for is option A - Process costing would be appropriate for a jeweler who makes custom jewelry to order.

3 0
3 years ago
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