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Leona [35]
2 years ago
8

Steady Company’s stock has a beta of 0.20. If the risk-free rate is 6% and the market risk premium is 7%, what is an estimate of

Steady Company’s cost of equity?
Business
1 answer:
777dan777 [17]2 years ago
5 0

Answer:

the estimation of the cost of equity is 7.4%

Explanation:

The computation of the estimation of the cost of equity is shown below:

Here we used the Capital Asset Pricing model formula i.e.

Cost of equity = Risk free rate + Beta × market risk premium

= 6% + 0.20 × 7%

= 6% + 1.4%

= 7.4%

Hence, the estimation of the cost of equity is 7.4%

We simply applied the above formula so that the correct value could come

And, the same is to be considered  

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Proponents of the recently introduced tax on sales of new luxury boats had argued that a tax of this sort would be an equitable
Vesnalui [34]

Answer: Option (B) is correct.

Explanation:

The new tax on sales of these luxury boats considered to be a reasonable way to boost government revenue thereby tax burden would most likely fall only on the wealthy individual and therefore neither they nor any other individual would suffer.  

But 20% of employees hired by manufacturers of these luxury boats lost their jobs as a result of the respective tax.

If true, the following will most strongly support the above arguments: The tax would induce a net gain in revenue created by tax for the state only if yearly revenue that it creates goes beyond the total of yearly tax-revenue decline resulting from employees loss of jobs.

4 0
3 years ago
Bev Smith makes hand-braided mats, at a cost of $40 per mat, to sell at local craft shows. She has 30 mats on hand for the next
erik [133]

Answer:

Bev's markup per mat in dollar is 20$

Bev's markup per mat in percentage is 50%

i think

Explanation:

7 0
3 years ago
The corporation Tough TVs Corp. makes a profit in its first year of existence. The managers of the corporation decide to reinves
yan [13]

Answer:

D. Retained earnings

Explanation:

Retained earnings refer to those profits that are not distributed back to the shareholders as dividends but rather are retained for a specific purpose which may include reinvesting the money back, debt payments, purchase of assets and so on. It also refers to the amount of profit remaining after dividends has been paid to shareholders. Retained earnings does not necessarily mean that there was surplus cash in an accounting year. It only identifies for what purpose is the product made been used for. In this case, since the managers decided to reinvest their profits the following year it is called retained earnings.

5 0
3 years ago
Assume Atlantic Fish sells 3,200 pounds of fish per month at a price of $2.90 a pound. The variable cost per pound is $2.22. Cur
blsea [12.9K]

Answer:

The break-even level of sales is equal to 3372.64 pounds.

Explanation:

The quantity of fish sold per month is 3,200 pounds.

The price of fish is $2.90/pound.

The variable cost per pound is $2.22.

The monthly required return is 1.2%.

Contribution per unit will be

=Selling Price-Variable Cost

=$2.9-$2.22

=$0.68 per unit

Loss on account of changing to net 30 policy

=Quantity*Selling Price*required return

=Quantity*$2.9*1.2%

To break even, excess Contribution should be equal to loss on policy change

or,

Here, we assume quantity to be X

(X-3200)*$0.68 = X*$2.9*1.2%

(X-3200)*19.54= X

18.54X=$62,528.74

X=\frac{62,528.74}{18.54}

X=3372.64 pounds

3 0
3 years ago
When an employee's behavior does not improve over time through progressive disciplinary measures, ____ is the final option.
Hunter-Best [27]

Answer:

Discharge.

Explanation:

This is seen to be a formal way of relieving an employer off his duties due to many wrong reasons which can be easily tagged misconduct. This is is not the first step of the disciplinary action as verbal warnings and other written warnings must have been sent to the said employee(s) before dismissal. Which is seen to be the final step by the employer. Some employees are seen to try to appeal this termination as most cases is seen to be failed attempts as their cases has already been settled by the panel.

8 0
3 years ago
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