Answer:
The alpha of the stock is 3.7%.
Explanation:
Alpha is the abnormal or additional return expected or received on a stock in excess of the required rate of return for such a stock as calculated by the Security market line or Capital asset pricing model equation.
We first need to calculate the required rate of return for such a stock and then deduct that rate from the expected rate of return to reach at alpha or the abnormal return.
- Required rate of return (r) = 0.05 + 1.1 * (0.08 - 0.05) = 0.083 or 8.3%
The abnormal return or alpha for such a stock is,
- Alpha = 12% - 8.3% = 3.7%
Debitors are the assests of business
Answer:
Market price of bond = $2,166.30
Explanation:
Step 1
<em>Calculate the interest payment per 6 months and number of periods</em>
Interest rate per 6 months = (5.96% × 2000)/2 = 59.6
Number of periods = 19 × 2 = 38 periods
Step 2
<em>Calculate the Present Value (PV) of the interest payment</em>
Yield per six month = 5.3%/2 = 2.65%
PV = A × (1+r)^(-n)
= 59.6× ( (1.0265)^(-38)/0.0265 )
= 59.6 ×23.7685
= $1,416.60
Step 3
<em>Calculate the PV of the Redemption Value (RV)</em>
PV = RV × (1+r)^(-n)
= 2000 × (1.053)^(-19)
= 749.705925
Market price of Bond =1,416.60 + 749.70
= $2,166.30
Market price of bond = $2,166.30
<u>Answer:</u>
<u>Appeal the decision </u>
<u>Explanation:</u>
In law, it allows for the losing party of a verdict to appeal the decision of a lower court to a higher court.
Thus, as a partner of XYZ accounting firm will advise the firm to appeal the fine and charges of negligence brought against it, doing so is a constitutional right. Depending on the outcome of the appeal case, appropriate measures would be taken to avoid any long term effects on the firm.
Answer:
Break-even point= 150,000 hangers
Explanation:
Giving the following information:
It charges $0.04 and estimates its variable cost to be $0.01 per hanger. Laguna’s total fixed cost is $4,500 per month.
To calculate the number of hangers we need to use the following formula:
Break-even point= fixed costs/ contribution margin
Break-even point= 4,500 / (0.04 - 0.01)= 150,000 hangers
