1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Anarel [89]
3 years ago
6

Suppose the​ risk-free return is 6.5 % and the market portfolio has an expected return of 10.3 % and a standard deviation of 16

%. Johnson​ & Johnson Corporation stock has a beta of 0.31. What is its expected​ return?
Business
1 answer:
CaHeK987 [17]3 years ago
4 0

Answer:

= 7.678%

Explanation:

Data provided

Risk free rate = 6.5%

Beta = 0.31

Marker return rate = 10.3%

Risk free rate = 6.5%

The computation of expected return is shown below:-

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

= 6.5% + 0.31 × (10.3% - 6.5%)

= 6.5% + 0.31 × (3.8%)

= 6.5% + 1.178%

= 7.678%

You might be interested in
Below are several transactions for Scarlet Knight Corporation. A junior accountant, recently employed by the company, proposes t
hram777 [196]

Answer:

Scarlet Knight Corporation

Posting of transactions:

1. Owners invest $5,500 in the company and receive common stock. Common Stock 5,500 Cash 5,500

Wrong. Correct Posting: Cash 5,500 Common Stock 5,500

2. Receive cash of $2,100 for services provided in the current period. Cash 2,100 Service Revenue 2,100

Correct.

3. Purchase office supplies on account, $110. Supplies 110 Cash 110

Wrong. Correct Posting : Supplies 110 Accounts Payable 110

4. Pay $410 for next month's rent. Rent Expense 410 Cash 410

Wrong. Correct Posting: Rent Prepaid 410 Cash 410

5. Purchase office equipment with cash of $1,250. Cash 1,250 Equipment 1,250

Wrong. Correct Posting: Equipment 1,250 Cash 1,250

Explanation:

1. Owners invest $5,500 in the company and receive common stock.  Cash is increased and Common Stock increased by $5,500.

2. 2. Receive cash of $2,100 for services provided in the current period.

Cash is increased and Service Revenue increased by the same amount.

3. Purchase office supplies on account, $110.

No cash payment is involved with this transaction since it was on account.  The accounts involved and which increased by $110 are Supplies and Accounts Payable.

4. Pay $410 for next month's rent. The amount is for next month.   As such no Rent Expense account is involved.  Instead, the accounts involved are Rent Prepaid and cash.  While Rent Prepaid increases, Cash is reduced.

5. Purchase office equipment with cash of $1,250. Equipment received value and will increase by $1,250 while Cash gave value and will reduced by $1,250 and not vice versa.

6 0
3 years ago
An individual is planning to set-up an education fund for her daughter. She plans to invest $7,700 annually at the end of each y
daser333 [38]

Answer:

$96,154.20

Explanation:

We are to find the future value of the annuity

The formula for calculating future value = A (B / r)

B = [(1 + r)^n] - 1  

A = Amount

R = interest rate  

N = number of years

[(1.08)^9 - 1 ] / 0.08 = 12.487558

12.487558 x $7,700 = $96,154.20

4 0
3 years ago
Which of the following exemplifies a benefit of good​ communication?
Katyanochek1 [597]

Answer:E- Earlier warning of potential problems.

Explanation:Benefits of a good communication are numerous and are listed below:

1- It gives clarity and direction.

2-Effective communication skills provide clear and defined policies. 3-Organizational communication helps organization to be successful. 4- Effective interpersonal communication skills such as listening skills, making eye contact gives boost to your personality.

5- It informs of earlier warnings of potential problems.

5 0
3 years ago
Variable costs for Coronado Industries are 30% of sales. Its selling price is $120 per unit. If Coronado sells one unit more tha
nika2105 [10]

Answer:

Income will increase by $84.

Explanation:

<u>The break-even point is the number of units required to cover the fixed costs. Net income is zero.</u>

First, we need to calculate the unitary variable cost:

Unitary variable cost= 120*0.3= $36

<u>Now, the unitary contribution margin:</u>

unitary contribution margin= 120 - 36

unitary contribution margin= $84

Income will increase by $84.

8 0
2 years ago
Last year Christine worked as a consultant. She hired an administrative assistant for $15,000 per year and rented office space (
mel-nik [20]

Answer:

Explicit costs - $51,000

Explicit costs are those for which a person incurs in actual spending of money. In this case, Christine had to pay $15,000 in wages, and $36,000 in rent ($3,000 x 12). These are expenses that she had to pay money for, and that had to be accounted for in the accounting books, and in the financial statements. These are in other words, explicit costs.

Implicit costs - $40,000

Implicit costs are simply the opportunity costs. An opportunity cost is the cost of the next more valuable alternative when faced with two or more options. No money is paid for this costs. The implicit costs for Christine were the $40,000 that she not receive as wages if she had continued working at a real state firm.

8 0
3 years ago
Other questions:
  • 4 STAGES OF PLANNING ---&gt;UNPLANNED STAGE ---&gt;BUDGETING-SYSTEM STAGE ---&gt;ANNUAL PLANNING STAGE ---&gt;STRATEGIC PLANNING
    13·1 answer
  • A customer has been receiving confirmations and statements by mail and asks the registered representative if these can be sent b
    5·1 answer
  • 1. Discuss the three components of strategy as they relate to Theo Chocolate's new strategy. – distinctive competence, scope, an
    9·1 answer
  • Nakato, a South Asian country, exported goods worth $500 million and imported goods worth $400 million in the last fiscal year.
    8·2 answers
  • In the competitive sports drink market, Gatorade pays very close attention to the activities of Powerade, a major __________ com
    8·1 answer
  • The law of comparative advantage indicates thata. specialization and exchange will permit trading partners to maximize their joi
    5·1 answer
  • Laila created a new piece of workout gear. She's calling it the Toned Tushie. Although she couldn't initially find potential inv
    13·2 answers
  • Exhibit 22-8 Above shows how output changes as the only one variable input, labor, changes. At what unit of labor does diminishi
    5·1 answer
  • The market structure in which the behavior of any given firm depends on the behavior of the other firms in the industry is
    9·1 answer
  • From the consumer’s perspective, the elements of an imc strategy can be viewed as being either.
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!