Answer:
The discount rate assign to a new project with a Beta of 1.25 is 13.94%
Explanation:
The applicable formula is the Capital Asset Pricing Model formula of Miller and Modgliani quoted below:
Ke = Rf + (Market risk premium x Beta)
Currently Ke=14.945%
Beta =1.38
Risk free rate of return (Rf) is 4.25%
Market risk premium is the unknown
14.945%=4.25%+(Market Risk Premium)*1.38
14.945%-4.25%=Market Risk Premium*1.38
10.70%
=Market Risk Premium*1.38
10.70%/1.38=Market Risk Premium
Market Risk Premium =7.75%
However, the new project cost of equity has to be determined due to having a different Beta factor of 1.25(a different risk appetite)
Using the above formula, we have
Ke=4.25%+(7.75%
*1.25)
Ke =13.94%
The formula is: Assets = Liabilities + Shareholders' Equity. The three components of the basic accounting formula are: Assets. These are the tangible and intangible assets of a business, such as cash, accounts receivable, inventory, and fixed assets
To solve for the cross-price elasticity of demand:
Take the quantity of the diamonds demanded and divide it by the decrease in the price of sapphires.
Cross-price elasticity of demand = 15/25
Cross-price elasticity of demand = 0.6
When you are solving for the cross-price elasticity of demand, you are seeing the response to the demand of a item when price changes for another good.
Answer:
Concord Co.
Income Statement
For the Year Ended December 31, 2020
Revenues:
Sales revenue $555,600
Expenses:
Cost of goods sold ($320,200)
Salaries and wages expense ($120,100)
Other operating expenses ($11,210)
Income tax expense ($25,590)
Net income: $78,500
Earnings per share: $0.74
Increase in value of company reputation and unrealized gain on value of patents are not included in this income statement.
Answer:
a positive incentive I think
Explanation:
