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brilliants [131]
3 years ago
10

Company A has a beta of 0.70, while Company B's beta is 0.80. The required return on the stock market is 11.00%, and the risk-fr

ee rate is 4.25%. What is the difference between A's and B's required rates of return? (Hint: First find the market risk premium, then find the required returns on the stocks.)
Business
1 answer:
alina1380 [7]3 years ago
5 0

Answer:

the differene in the required rate of return of eahc company is 0.675%

Explanation:

we solve using the CAPM method:

Ke= r_f + \beta (r_m-r_f)  

risk free 0.0425

market rate 0.11

Company A

beta(non diversifiable risk) 0.7  

Ke= 0.0425 + 0.7 (0.0675)  

Ke 0.08975 = 8.975%

Company B

beta(non diversifiable risk) 0.8

Ke= 0.0425 + 0.8 (0.0675)

Ke 0.09650 = 9.65%

difference: 9.65% - 8.975% =  0.675%

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<u>Explanation:</u>

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3 years ago
Building an organization capable of good strategy execution entails:
MrMuchimi

Answer:

a. Staffing the organization, building core competencies, and structuring the organization and work effort

Explanation:

Staffing is the management function undertaken with an objective to hire right people for the most suitable job position, and keeping filled organizational positions throughout.

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Thus for an organization to be capable of executing good strategy, the above three are a requisite.

7 0
3 years ago
Read 2 more answers
"Our teams in different countries have learned a great deal, and I am putting together an international team to study and share
KIM [24]

Answer:

c. Encourage team members to socialize online by sharing photos and videos. Reach out to people from cultures where proactively sharing ideas is not valued.

Explanation:

According to a different source, these are the options that come with this question:

a. Speak about everyone on the team as though they are the same to help team members feel they are being treated equally. Do not single people out for special recognition.

b. Understand that some people use online technology more than others and cannot be expected to participate as much. Accept that Internet culture often involves “trolling,” or disrespectful disagreement, and do not interfere if this happens.

c. Encourage team members to socialize online by sharing photos and videos. Reach out to people from cultures where proactively sharing ideas is not valued.

d. To promote a sense of privacy, do not monitor online team communications. Keep information that may change frequently to yourself, as sharing it would be confusing.

This is the strategy that is most likely to help this person develop his team. It is important to understand that, if this is an international team made up of many different people from different countries, then it is likely that most interaction will take place online. Therefore, it is important to encourage them to utilize the online resources that are available to them, such as sharing pictures and videos. It is also important to motivate them to proactively share ideas, especially those who come from countries where this is not particularly valued.

5 0
3 years ago
Rick works off commission. He earns 10 percent of all manufacturing equipment he sells. If he made a sale of $9,000, how much wa
Leto [7]

Answer:

C. $900

Explanation:

Divide your 9000 by 10 and theres your answer 900

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3 years ago
On October 1, Year 1, Jason Company paid $7,200 to lease office space for one year beginning immediately. What is the amount of
victus00 [196]

Answer:

The amount of rent expense that will be reported on the Year 1 income statement is $1,800 .

The cash outflow for rent that would be reported on the Year 1 statement of cash flows is $5,400.

Explanation:

Though the amount paid was paid on October 1, Year 1 it will only be expensed from October to December for year 1.

The duration of the payment is 12 months, hence  

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Rent expense for year 1 = $600 × 3 = $1,800

The ending balance in the prepaid rent account will be  

= $7,200 - $1,800

= $5,400

This will be the cash outflow for rent that would be reported on the Year 1 statement of cash flows.

6 0
3 years ago
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