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Alecsey [184]
3 years ago
9

You hold a portfolio consisting of a $5,000 investment in each of 20 different stocks. The portfolio beta is equal to 1.12. You

have decided to sell a coal mining stock (b = 1.00) at $5,000 net and use the proceeds to buy a like amount of a mineral rights company stock (b = 2.00). What is the new beta of the portfolio?
Business
1 answer:
bija089 [108]3 years ago
6 0

Answer:

The new beta of the portfolio 1.17

Explanation:

Portfolio beta is sum of weighted beta of all stocks consisting of it.

Portfolio beta = 1.12

Weight of each portfolio = 5,000

All weight or Amount = 5,000 * 20 = 100,000

Weight of one stock = 5,000 / 100,000 = 0.05

Foregone beta or beta of sold stock = 1

Acquired beta or beta of purchased stock = 2

Weight of both are same = 0.05

New beta = Portfolio beta - (foregone beta * weight) + (Acquired beta * weight)

New beta = 1.12 - (1 * 0.05) + (2 * 0.05)

New beta = 1.12 - 0.05 + 0.1

New beta = 1.17

So New portfolio beta is 1.17

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Spencer Chemical Corporation produces an oil-based chemical product which it sells to paint manufacturers. In 2019, the company
Snowcat [4.5K]

Answer:

Total incremental net income = $28,000

Incremental per gallon increase in net income = $0.70 per unit

Explanation:

a. The preparation of incremental statement to find out the increase in net income

Total production                                  $140,000

Less:

Incremental cost

Direct material              $68,000

($1.70 × 40,000 gallons)

Direct labor                  $24,000

($0.60 × 40,000 gallons)

Variable manufacturing

overhead                     $20,000

($0.50 × 40,000 gallons)

Total incremental cost                      ($112,000)

Total incremental net income          $28,000

b. Incremental per gallon increase in net income = Total incremental net income ÷ Total quantity

= $28,000 ÷ 40,000 gallons

= $0.70 per unit

Therefore the total incremental net income is $28,000 and incremental per gallon increase in net income is $0.70 per unit.

5 0
3 years ago
I'll give brainliest!!! Which descriptions offer examples of Governance workers? Check all that apply.
Vlad1618 [11]

Answer:

A, B, and E

Explanation:

3 0
2 years ago
Read 2 more answers
Mike started a calendar year business on September 1st of this year by paying 12 months rent on his shop at $1,000 per month. Wh
solong [7]

Answer:

C. $12,000 under the cash method and $4,000 under the accrual method

Explanation:

Under the cash basis of accounting, whenever an amount is received or paid, it is recognized in the books of accounts

Whereas, on the accrual basis of accounting, the cash received / payment or not it is recognized in the books of accounts. It is recorded when it is earned not when it is received or paid.  

So, by this above information

The cash method would recognize $12,000 ($1,000 × 12 months)

Whereas

The accrual method would recognize $4,000 ($1,000 × 4 months)

We assume the books are closed on December, 31

8 0
3 years ago
Coach's agreement with Lexus to produce automobiles with Coach leather interior is an example of A. co-branding. B. architectura
nikitadnepr [17]

Answer:

CO-BRANDING

Explanation:

Also known as brand partnership, it is a marketing strategy that incorporates multiple brands on a good or service. It involves the brands of at least 2 organisations. Just like the Lexus and coach described above.

8 0
3 years ago
Allure Company manufactures and distributes two products, M and XY. Overhead costs are currently allocated using the number of u
Crazy boy [7]

Answer:

Results are below.

Explanation:

<u>First, we need to calculate the allocation rates:</u>

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Production setups= (73,000 / 30)= $2,433.33 per setup

Material handling= (49,000 / 91)= $538.46 per number of part  

Packaging costs= (246,000 / 156,000)= $1.58 per unit

<u>Now, we need to allocate costs to Product XY:</u>

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Production setups= 2,433.33*18= 43,799.94

Material handling= 538.46*23= 12,384.58

Packaging costs= 1.58*60,000= $94,800

Total allocated costs= $150,984.52

<u>Finally, per unit basis:</u>

Unitary cost= 150,984.52 /60,000= $0.27

8 0
3 years ago
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