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Nastasia [14]
3 years ago
9

The stock in Pal-Maine Foods has a beta of .85. The expected return on the market is 11.50 percent and the risk-free rate is 2.8

5 percent. What is the required return on the company's stock?
Business
1 answer:
algol [13]3 years ago
6 0

Answer:

the required rate of return is 10.20%

Explanation:

The computation of the required rate of return is shown below;

We know that

= risk free rate of return + beta × (market rate of return - risk free rate of return)

= 2.85% + 0.85 × (11.50% - 2.85%)

= 2.85% + 7.3525%

= 10.20%

hence, the required rate of return is 10.20%

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Read 2 more answers
Gelb Company currently manufactures 49,500 units per year of a key component for its manufacturing process. Variable costs are $
kirill [66]

Answer:

Incremental cost= $61,875

Explanation:

Giving the following information:

Gelb Company currently manufactures 49,500 units per year of a key component for its manufacturing process. Variable costs are $5.15 per unit, fixed costs related to making this component are $75,000 per year, and allocated fixed costs are $70,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.90 per unit

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Cost= 49,500*3.90= $193,050

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8 0
3 years ago
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Answer:

Predictive models

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