Answer:
Under CAPM:
Re = Rf + Beta(Rm - Rf)
Rf = 5%
Rm - Rf = 6%
Beta = 1.25
Re = 5% + (1.25 x 6%) = 12.5%
Under dividend discount model:
Re = (Div₁ / P₀) + g
Div₁ = $1.20
P₀ = $35
g = 8%
Re = ($1.20 / $35) + 8% = 11.43%
Under bond yield plus risk premium approach:
Re = Pre-tax cost of debt + risk premium over its own debt
Pre-tax cost of debt = 7%
risk premium over its own debt = 4%
Re = 7% + 4% = 11%
The highest cost of equity results from the CAPM model and it is 12.5% while the lowest results from using the bond yield plus risk approach (11%), the difference is 1.5% between them.
Answer:
<u>New York Times (NYT) Cost per Thousand Impressions (CPM):
</u>
Cost per Thousand Impressions = Advertisement Cost / (Impressions / 1000)
Cost per Thousand Impressions = $12,000 / (251,000 /1000)
Cost per Thousand Impressions = $12,000 / 251
Cost per Thousand Impressions = $47.8
<u>NYT CPM for College Professors:
</u>
Impressions generated = 251,000 × 11%
Impressions generated = 27610
CPM = Advertisement Cost / (Impressions / 1000)
CPM = $12,000 / (27610 / 1000)
CPM = $12,000 / 27.61
CPM = $434.6
Answer:
The correct answer is letter "B": a claim that entitles the owner to future income from the seller.
Explanation:
Financial assets are intangible resources that represent an entity's ownership claim or contractual rights to future payments. Common types of financial assets are cash, stocks, bonds, bank deposits, options, futures contracts, and derivatives. The value of an asset depends on supply and demand and its underlying value.
Answer:
Broad Cost Leadership
Explanation:
There are 4 generic business strategies in M. Porter's Model:
- Cost leadership ( Competitive advantage: Cost / Broad markets)
- Cost Focus ( Competitive advantage: Cost / Narrow markets)
- Diferentiation Leadership ( Competitive advantage: Differentiation / Broad markets).
. Differentiation focus: ( Competitive advantage: Differentiation / Narrow markets)
In the case of cost leadership is a set of actions designed to have lower cost in the market based on efficiency
In this case,the market is the airline industry where Southwest is compiting but its strategy is to have a basic quality product based in its cost efficient proposal.
Answer:
Dr Cash $427,200
Dr Discount on Bonds payable $17,800
Cr Bondss payable $445,000
Explanation:
Preparation of the journal entry to record the sale of these bonds on January 1, 2022
Dr Cash $427,200
($445,000 × 0.96)
Dr Discount on Bonds payable $17,800
($445,000-$427,200)
Cr Bonds payable $445,000
(Being to record the sale of the bond )
