The answers are the following:
a.
Brandon:
$7,000 + [($10,000/4)×3¿= $8,500
Ryan:
$7,000 + [($10,000/4)×1¿= $7,500
b.
Brandon $7,000
Ryan <span>$7,000</span>
An externality is defined as the cost or benefit that affects a group when the group did not choose to receive that cost or benefit. This results in either a position or negative consequence based on what happened to a third party that was not origionally involved.
Someone who wouldn't choose to pay for a certain good or service but who'd get the benefits of it anyway is the best definition given to be the answer to this question.
Answer:
a. 14.75%
b. Under priced
Explanation:
The computation for the required rate of return is shown below:
a. Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
= 6% + 1.25 × (13% - 6%)
= 6% + 1.25 × 7%
= 6% + 8.75%
= 14.75%
b. As the required rate of return comes 14.75% and the required return is 16% so it is under priced as expected return is more than the required return
Tim should be in governance.
Suzette should be in planning
Answer:
Explanation:
Yield rate on unsecured bonds=12%
Yield rate on zero coupon bond=12%
Yield rate on 10% mortgage bonds=12%
Total debt value=10m+25m+20m=55m
Weight of unsecured bonds=10/55=0.182
Weight of zero coupon bonds=25/55=0.455
Weight of 10% mortgage bonds = 20/55= 0.363
Cost of debt=0.182*12+ 0.455*12+0.363*12=12%
