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Mnenie [13.5K]
3 years ago
11

Linke Motors has a beta of 1.30, the T-bill rate is 3.00%, and the T-bond rate is 6.5%. The annual return on the stock market du

ring the past 3 years was 15.00%, but investors expect the annual future stock market return to be 13.00%. Based on the SML, what is the firm's required return?
Business
1 answer:
anzhelika [568]3 years ago
4 0

Answer:

cost of capital 16%

Explanation:

SML formula:

Ke= r_f + \beta (r_m-r_f)\\\\Where:\\r_f =$ risk free rate\\r_m= $ market rate\\\beta =non-diversifiable \:risk

r_f = 3%

β = 1.3

r_m = 13%

0.03 + 1.3(0.13-0.03)

firm's required return = .16 = 16%

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On January 2, 2018, Howdy Doody Corporation purchased 15% of Ranger Corporation's common stock for $58,000. Ranger's net income
insens350 [35]

Answer:

Howdy Doody show in the 2018 income statement as income from this investment is $24225

Explanation:

given data

purchased = 15%

common stock = $58,000

net income 2018 = $15,000

net income 2019 = $58,000

dividend  = $61,500

fair value = $73,000

to find out

How much Howdy Doody show in the 2018 income statement as income from this investment

solution

we know that net income to be reported as income by investment is the sum of income from dividend + unrealised gain

so here

unrealised gain = increase in value of stock that is

= $73,000 - $58,000 = $15000      .............1

and

income from dividend is  = 15 % of $61,500

income from dividend = $9225       .................2

now add equation 1 and 2

Howdy doody show in 2018 income statement as income from this investment = Dividend revenue + Unrealized holding gain

income statement = $9225 + $15000

income statement = $24225

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The correct option is b. new responsibilities to learn and people will expect much from you.

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The term "promotion" is used in a variety of settings; two of the most common ones are when talking to a career promotion and when discussing the marketing strategy of promoting a product.

Some key features of promotion are-

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brainly.com/question/20317314

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