1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
son4ous [18]
2 years ago
11

Nestlé of Switzerland is revisiting its cost of equity analysis. As a result of extraordinary actions by the Swiss Central​ Bank

, the Swiss bond index yield​ (10-year maturity) has dropped to a record low of ​%. The Swiss equity markets have been averaging ​% ​returns, while the Financial Times global equity market​ returns, indexed back to Swiss​ francs, stands at ​%. ​Nestlé's corporate treasury staff has estimated the​ company's domestic beta at ​, but its global beta​ (against the larger global equity market​ portfolio) at .
a. What is​ Nestlé's cost of equity based on the domestic portfolio for a Swiss​ investor?
b. What is​ Nestlé's cost of equity based on a global portfolio for a Swiss​ investor?
Business
1 answer:
jasenka [17]2 years ago
5 0

Answer:

The numbers are missing, so I looked for similar questions to fill in the blanks:

Rf (Switzerland) = 0.54%

Rm (Switzerland) = 8.5%

Beta (Switzerland) = 0.919

Rm (global) = 9.06%

Beta (global) = 0.532

a. What is​ Nestlé's cost of equity based on the domestic portfolio for a Swiss​ investor?

Re (Switzerland) = Rf + [Beta x (Rm - Rf) = 0.54% + [0.919 x (8.5% - 0.54%)] = 0.54% + 7.32% = 7.86%

b. What is​ Nestlé's cost of equity based on a global portfolio for a Swiss​ investor?

Re (global) = Rf + [Beta x (Rm - Rf) = 0.54% + [0.532 x (9.06% - 0.54%)] = 0.54% + 4.53% = 5.07%

You might be interested in
How will the rapo rate cut affect the economy?​
jeka94

Answer:

The decrease in repo rates is to aim at bringing in growth and improving economic development in the country. Consumers will borrow more from banks thus stabilizing the inflation. A decline in the repo rate can lead to the banks bringing down their lending rate

3 0
3 years ago
Here is the accounting equation for Sam's auto parts $18,000= $12,000 +$6,000 The owner withdrew $1,500 for personal use. Write
Eva8 [605]

Answer:

$18000=$12000+$4500

5 0
3 years ago
A company has 360,000 shares authorized, 200,000 shares issued, and 100,000 shares outstanding. The balance in its Common Stock
Alona [7]

Answer:

$1 par value

Explanation:

The computation of the par value of the stock after the split is given below:

= $200,000 ÷ (100,000 × 2 )

= $200,000 ÷ 200,000

= $1 par value

Hence, the par value of its stock after the split is $1 par value

We simply divide the balance by the number of outsanding shares so that the par value could come

5 0
3 years ago
What is Virgo sign means
atroni [7]

Answer: Virgo is an earth sign historically represented by the goddess of wheat and agriculture, an association that speaks to Virgo's deep-rooted presence in the material world. Virgos are logical, practical, and systematic in their approach to life. ... Virgo is governed by Mercury, the messenger planet of communication.

Explanation: But I'm a Taurus and I'm the queen of all Zodiac signs

Leos are the Kings of all Zodiacl signs and I'm lucky I'm on the day of the Taurus zodiac change April 20th and my birth mineral is Crytal. Or Diamond

7 0
2 years ago
​Your firm manufactures motorcycles for the consumer market. You purchase raw materials to build the motorcycles from a variety
Paha777 [63]

Answer:

The correct answer is letter "E": Derived demand.

Explanation:

Derived demand implies the quantity requested to manufacture a good is directly related to the supply requested from the market. If the demand for the good increases, it means the quantity of the materials needed to manufacture that good will increase as well.

6 0
2 years ago
Other questions:
  • On the twentieth day of the month, room sales at the Motor Lodge Motel exceeded its breakeven point for the month. Revenue gener
    14·1 answer
  • A corporation has 12,000 shares of $20 par stock outstanding that has a current market value of $150. If the corporation issues
    11·1 answer
  • The two reasons why bankruptcy is a false concern about the public debt are:
    7·1 answer
  • The quantity demanded of a good is the amount that buyers are a. willing to purchase. b. willing and able to purchase. c. willin
    8·1 answer
  • yyyytttttttttttttttttttttttttttttttttttttttttttttttttttttttttttttyutttttyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyytyyttt
    6·2 answers
  • A profit-maximizing entrepreneur rents an apple orchard for a day. He is a price taker in both the market for labor and the mark
    8·1 answer
  • g If the price level rises and the money wage rate stays the same, what effect will this have upon labor demanded and production
    5·1 answer
  • Any christian guys wanna be friends?
    13·2 answers
  • QUIZ ENDS AT 12:OOPM TODAY. WILL MARK BRAINLIEST!!!!!
    6·2 answers
  • The market price of an $1,000,000, ten-year, 12% (pays interest semiannually) bond issue sold to yield an effective rate of 10%
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!