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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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Art [367]
In doing so, she should be sure to emphasize clients' options for saving money, such as bundling services or choosing less <span>comprehensive plans.
Telling this options will reduce the chance of that customer to stop using the service and move out to another competitor. Providing saving money options will give a reward for customers who are loyal to the company and make them feel valued.</span>
7 0
3 years ago
The differences between the two are that ________ involve(s) both manufacturing and procurement with multiple manufacturers, sup
maks197457 [2]

The differences between the two are that <u>supply chain </u>involve(s) both manufacturing and procurement with multiple manufacturers, suppliers, and retail companies.<u> logistics </u> refers to distribution activities in one company.

<h3>What is Supply chain and logistics?</h3>

Supply chain has to do with production or manufacturing and distribution of goods produce to suppliers, retailers or customers while logistics has to do transporting or distribution of goods or products.

Supply chain involve the following:

  • Manufacturer
  • Supplier
  • Warehouses
  • Distribution
  • Retailers

Logistics involve:

  • Warehouse
  • Distribution

Inconclusion <u>supply chain </u>involve(s) both manufacturing and procurement with multiple manufacturers, suppliers, and retail companies.<u> logistics </u> refers to distribution activities in one company.

Learn more about supply chain and logistics here:brainly.com/question/25160870

4 0
3 years ago
Echo Corporation uses a job-order costing system and applies overhead to jobs using a predetermined overhead rate. During the ye
ozzi

Answer:

Actual overhead= $153,400

Explanation:

Giving the following information:

During the year the company's Finished Goods inventory account was debited for $360,000 and credited for $338,800. The ending balance in the Finished Goods inventory account was $36,600.

At the end of the year:

Manufacturing overhead was overapplied by $15,900.

If the applied manufacturing overhead was $169,300.

Because the manufacturing overhead was overapplied, we need to subtract from the applied overhead to determine the actual overhead.

Actual overhead= applied overhead - overapplied overhead

Actual overhead= 169300 - 15900= $153,400

5 0
3 years ago
the italian airline alitalia will pay $10 million to United Airlines one year from today. The spot rate is $1.35/E, while the 1-
Vitek1552 [10]

Answer:

alitalia should do the forward hedge to hedge its transaction exposure

Explanation:

Alitalia can construct the money market hedge as follows

1. borrow Euro whose present value is equal to the amount to be paid.

2. convert it to foreign currency at the current spot rate.

3. place it in a deposit

4. make the payment when the deposit reaches maturity

PV of payment = 10000000/1.05

                         = 9523809.525

converting in to Euro at the spot rate we get 6802721.09 Euros

so Alitalia has to borrow the above amount and convert it and invest it at 5%.

now the payable amount from the loan is  6802721.09(1+0.03) = 7006802.72 Euros

Hence Alitalia has effective managed to locl in a forward rate of 1.427$/euros (10000000/7006802.72)$/euros

Therefore, alitalia should do the forward hedge to hedge its transaction exposure

6 0
4 years ago
A company using activity-based costing has the following overhead activities and costs: factory maintenance $50,000; machine set
Elena-2011 [213]

Answer:

$75,000

Explanation:

Given that,

Factory maintenance = $50,000;

Machine setup = $100,000;

Heating and lighting = $25,000

Machine repair = $10,000

Therefore,

Total costs are as follows:

= Factory maintenance + Heating and lighting

= $50,000 + $25,000

= $75,000

Therefore, the total costs in the plant services activity are $75,000.

4 0
3 years ago
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