Select the correct answer from each drop-down menu.

Data for Hugh’s Corporation is provided below. Hugh’s recently acquired some risky assets that caused its beta to increase by 30

I am Lyosha [343]

Answer:

The stock's new expected rate of return is 14%

Explanation:

Ke=Rf+beta(Mrp-Rf)

Ke is the cost of capital is 10.20%

Rf i the risk free rate which is unknown

beta is 1.00

(Mrp-Rf) is the market risk premium at 6%

10.20%=Rf+1.0(6%)

10.20%=Rf+6.0%

Rf=10.20-6.00%

Rf=4.20%

Beta for the risky asset is 1.00*130%=1.3

New risk rate is the old rate plus inflation rate of 2.00%

new risk free=4.2%+2%=6.2%

The expected return on the new asset is computed thus:

Ke=6.2%+1.3(6%)

Ke=6.2%+7.8%

Ke=14%

3 0

2 years ago

An RR sold shares of new stock issue of ABC Corp. to a customer at $20 per share. After a week, ABC is selling at $10. The RR of

Vanyuwa [196]

Answer:

It is a violation of NASD rules against guaranteeing a customer against loss.

Explanation:

In this case the RR is guaranteeing the customer against loss. The customer initially bought the shares for $20 the new price is $10. The RR now coming in to buy the shares above market value is a way to guarantee the customer against loss, and its a NASD violation.

7 0

3 years ago

Brazil has a population of about 210 million, with about 150 million over the age of 15. Of these, an estimated 25 percent, o

kvasek [131]

Answer:

B. Since the development of human capital is an important determinant of economic growth, Brazil's literacy and reading rates suggests its potential economic growth rate is lower.

Explanation:

According to the New Growth Theory, it is both human desire and capital the factors that drive economic growth the most.

A literate population that does not read a lot means a lower level of human capital for Brazil, which in turn means that Brazil has a lower potential for economic growth. In order to increase economic growth, the Brazilian government should promote readership among its population.

3 0

2 years ago

The cost of the merchandise inventory that the business ▼ has sold to customers.

Ivan

c a type of marchandiser that buys merchadise from a manufacture

8 0

3 years ago

Mauro Products distributes a single product, a woven basket whose selling price is $21 per unit and whose variable expense is $1

Grace [21]

Answer:

1. Break even points in units will be = 2,700 units

2. Break-even point in dollar sales = $56,700

3. In case fixed expense increase by $600 then Break even point in unit sales = 2,900 units

Explanation:

Break even point = $\frac{Fixed Cost}{Contribution per unit}$

Fixed Cost = $8,100

Contribution per unit = Sale Price - Variable Cost = $21 - $18 = $3

1. Break even points in units will be

= $\frac{8,100}{3} = 2,700 units.$

2. Break-even point in dollar sales

= Break even point in units X Sale price per unit

= 2,700 units X $21 = $56,700

3. In case fixed expense increase by $600 then Break even point in unit sales

= $\frac{8,100 + 600}{3}$ = 2,900 units

Final Answer

1. Break even points in units will be = 2,700 units

2. Break-even point in dollar sales = $56,700

3. In case fixed expense increase by $600 then Break even point in unit sales = 2,900 units

3 0

3 years ago