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ddd [48]
3 years ago
12

I am buying a firm with an expected perpetual cash flow of $1,000 but am unsure of its risk. If I think the beta of the firm is

0, when the beta is really 1, how much more will I offer for the firm than it is truly worth? Assume the risk-free rate is 4% and the expected rate of return on the market is 10%. (Input the amount as a positive value.)
Business
1 answer:
Nitella [24]3 years ago
8 0

Answer:

$15,000

Explanation:

Value of a perpetuality = cash flow / r

According to the capital asset price model: Expected rate of return = risk free + beta x (market rate of return - risk free rate of return)

4 + 0 (10 - 4) = 4

1,000/ 0.04 = 25,000

4 + 1 (10 - 4) = 10

1000 / 0.1 = 10,000

25,000 - 10,000 = 15,000

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Select the correct answer. What happens if you fail to pay your annual taxes? you will simply have to pay some penalty fees you
Vinvika [58]

The correct answer would be option A,  you will simply have to pay some penalty fees.

If you fail to pay your annual taxes,  you will simply have to pay some penalty fees.

Explanation:

People who earn income in a country are liable to pay a certain amount from their income as taxes to the government for enjoying the services given by the government to the citizens.

If you have filed for your taxes and then you are unable to pay them, then the Internal Revenue Service will charge you a failure to pay penalty. You will have to submit the penalty fee along with the taxed amount as soon as possible.

Learn more about Purpose of Taxation at:

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4 0
4 years ago
Green Manufacturing Company produces a product that has a variable cost of $30 per unit. Fixed costs amount to $240,000. The sel
Amiraneli [1.4K]

Answer:

A. 40,000 units

Explanation:

To break even, the total cost must be equal to the total revenue. The cost elements are the fixed and variable cost. The variable cost is dependent on the level of activities.

Let the number of units required to breakeven be g

cost = sale

30g + 240,000 = 36g

36g - 30g = 240000

6g = 240000

g = 40000

The company must produce and sell 40000 units to break even.

3 0
4 years ago
The most important elements in a business model include all of the following except: A. Selecting a growth strategy B. Verifying
worty [1.4K]

Answer:

Option A    

Explanation:

In simple words, business model refers to the strategy for creating a profit for a product. This defines the goods or services that the company is trying to offer, the intended audience that it has defined as well as the costs it plans.

A creative technology company must include a business plan, if only to draw funding, help it retain talent, and inspire leaders and managers. Established companies frequently have to review and revise their operating strategies, or struggle to predict emerging developments and obstacles. Investors will study and analyse the corporate strategies of all businesses that are involved in them.

Choosing a development procedure for growth is not really a part of a business framework, but a point of performance of the growth model. Other choices specifically address which kind of goods should be selected in a company with which specific market group and how you'd like to benefit from your package's particular quality.

4 0
4 years ago
The basic laws of forecasting help to avoid misapplication or misrepresentation of forecast results.
Zigmanuir [339]

Answer:

Law 2

Explanation:

In probability. As bigger the group we are trying to predict , the higher probability to be more accurate

8 0
4 years ago
There is no difference between you driving your car on public streets and Ford selling a product that it knows will sometimes ex
Gwar [14]

Answer:

1) The statement is: True.

2) The correct answer is letter:  Cost-Benefit Analysis.

Explanation:

2) The Cost-Benefit Analysis is a tool used to make decisions based on cost and benefit. You can use the Cost-Benefit Analysis to evaluate a single option or compare two or more alternatives to choose the best. The Cost-Benefit Analysis is used to calculate all the costs of a particular decision and compare them with the expected benefits of that decision.

1) In the example, driving on a street has the cost of being in danger of crashing but the benefit of traveling comfortably in your vehicle. Ford selling cars could cost some of them -for an "x" reason- to explode but the benefit is to profit from the sales. Thus, <em>there is no fundamental difference comparing the costs individuals are exposed while driving a car on the street and Ford being exposed to their cars' explosion</em>.

4 0
3 years ago
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