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hjlf
3 years ago
9

According to the CAPM, what is the market risk premium given an expected return on a security of 13.6%, a stock of 12, and a ris

k free interest rate of 4%.
a. 8%
b. 4.8%
c. 6.6%
d. 4%
Business
1 answer:
Neporo4naja [7]3 years ago
6 0

The question is incomplete. Here is the complete question

According to the CAPM, what is the market risk premium given an expected return on a security of 13.6%, a stock beta of 1.2, and a risk-free interest rate of 4%?

Answer:

8%

Explanation:

The expected return on security is 13.6%

The stock beta is 1.2

The risk free interest rate is 1.4

Therefore, using the CAMP , the market risk premium can be calculated as follows

13.6%= 4% + 1.2×MRP

13.6%-4%= 1.2MRP

9.6%=1.2MRP

MRP= 9.6/1.2

MRP= 8%

Hence the market risk premium is 8%

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Answer:

<em>Pre-vocational education</em> in general aims to make students prepared for a specific vocation, but not in a technical manner. This education often relates to subjects such as time management, workplace ethics, personal financial management, etc.

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3 years ago
Harms Shoe Company applies manufacturing overhead based on direct labor hours as the allocation volume. Information concerning m
andriy [413]

Answer:

Allocated overhead for july $227.20

Explanation:

Given data:

direct labor hours is 6100 hr

wages of labor is $14.20/hr

manufacturing overhead is $277,184

duration of labor is 5 hr

overhead allocation rate is given as

allocation rate = manufacturing overhead/ direct labor hour

allocation rate = \frac{277184}{6100} = $45.44/ direct labor hr

Allocated overhead for july = 5\times 45.44 =\$ 227.20

6 0
3 years ago
DC Construction has two divisions: Remodeling and New Home Construction. Each division has an on-site supervisor who is paid a s
hjlf

Answer:

The common fixed expenses = $246,000

Explanation:

Common fixed expenses are those costs that do not change with change in production volume, are not limited to a single segment of a business. In this example for a company with two divisions: Remodeling and new home construction, the administrative assistants' and president's salaries are fixed, because their annual salaries remain the same irrespective of the number of clients gotten during the year, and it is common because these two sectors (administration and presidency) are not directly traceable to any of the two divisions of the company, they are generally involved.

Therefore, the common fixed expenses are the salaries of the administrative assistants and the president which are:

Common fixed cost = 52,000 + 38,000 + 156,000 = $246,000

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3 years ago
What is alternating currents​
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Alternating current (AC) are those current which changes its polarity...
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3 years ago
Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $284,000 and credit sa
AVprozaik [17]

Answer:

Debit Bad debt expenses with 17,280; and Credit Allowance for Doubtful Accounts also with $17,280.

Explanation:

Bad expenses = ($284,000 × 7%) - $2,600 = $17,280

The adjusting will be as follows:

<u>Details                                                    Dr ($)                Cr ($)    </u>

Bad debt expenses                               17,280

Allowance for Doubtful Accounts                                17,280

<u><em>To record the amount estimated to be uncollectible                   </em></u>

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3 years ago
Read 2 more answers
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