Answer:
The risk premium on market is 8%
Explanation:
The CAPM or Capital Asset Pricing Model is used to calculate the required rate of return on a stock which is the minimum return that is expected or required by the investors to invest in a stock based on its systematic risk as measured by the beta of the stock.
The formula to calculate r under the CAPM is,
r = rRF + Beta * rpM
Where,
- rRF is the risk free rate
- rpM is the risk premium on market
To calculate the risk premium on market, we will input the available values for r, rRF and beta in the equation above.
0.158 = 0.07 + 1.1 * rpM
0.158 - 0.07 = 1.1 * rpM
0.088 / 1.1 = rpM
rpM = 0.08 or 8%
So, the risk premium on market is 8%
Answer:
option A,$19,200
Explanation:
The amount stock dividend issued that needs to be transferred from retained earnings to paid-in capital accounts by debiting the retained earnings and crediting the paid-in capital accounts is computed by the below formula:
Stock dividend value=stock dividend %* issued shares*market price
stock dividend % is 4%
issued shares is 40,000 shares
market price of stock is $12
stock dividend value=4%*40,000*$12=$19,200
The correct option is $19,200 option A.
One should be misled by the issue price of $8 per share,since that gives a different option which is wrong
Answer:
probably not paying it off in time or something
Explanation:
Answer:
D) = $3,927
Explanation:
<em>The cost of a product is the addition of direct material cost + direct labour cost + manufacturing overheads</em>
<em>Overhead absorption rate</em><em> = </em><em>Budgeted Overheads/ Budgeted machine hours</em>
= $45,000/100,000 hours
= $0.45
<em>Product cost</em><em> </em>= 2,000 + 400 + (0.45× 900)
= $2,805
<em>Bid price</em> = Product + ( mark up)
= 2,805 + (40% × 2,805)
= $3,927
<em>Bid price</em> = $3,927
