Answer:Beta of the bond = 0.63
Explanation:
According to the CAPM, Capital Asset pricing mode formulae, The expected return is given as
Expected return= Risk free rate + Beta ( Market premium)
where
Expected return = 10.5 percent
Market risk premium =10.0 percent
risk-free rate is 4.2 percent.
Expected return= Risk free rate + Beta ( Market premium)
Putting their values and solving, we have
10.5% = 4.2%+ Beta (10.0%)
10.5 %- 4.2%=Beta (10.0%)
Beta=10.5 %- 4.2%/10.0%
Beta=0.63.
Beta of the bond = 0.63
Based on the stock's price in 2020, the employee will most likely not bother to exercise the options.
<h3>When are options exercised?</h3>
Options are exercised by employees or other parties when the market price of the underlying stock is more than the price that the option can be redeemed at because this would lead to profit.
The underlying stock here is trading at $40 which is less than the price of redeeming the option so the employee will not exercise the options.
Find out more on exercising options at brainly.com/question/25750529
#SPJ1
Answer: b. the inventory management should be further examined.
Explanation:
The Quick ratio is calculated by deducting inventory from the current assets and then dividing that amount by current liabilities while the Current ratio is simply dividing the current assets by the current liabilities.
If the Current ratio increased, it means that the company has more current assets per current liabilities from last year. The fact that the quick ratio dropped however, points to most of the current asset increase being the inventory which means that the company is carrying a lot of inventory.
Their management of inventory such that they are carrying such amounts therefore needs to be further examined before a decision is made on their liquidity.
Answer:
A : balance sheet only
Explanation:
In the given question, the truck was purchased on credit and the truck is a fixed asset that comes under the balance sheet only because in the income statement, the expenses and revenues are recorded whereas retained earnings records profit which is left to the company.
So, it affects the balance sheet only. As balance sheet records all types of assets and all types of liabilities plus shareholder equity.