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Sonja [21]
3 years ago
8

Wild Swings Inc.’s stock has a beta of 2.5. If the risk-free rate is 6% and the market risk premium is 7%, what is an estimate o

f Wild Swings’ cost of equity?
Business
1 answer:
Bess [88]3 years ago
3 0

Answer:

r = 0.235 or 23.5%

Explanation:

Using the CAPM, we can calculate the required/expected rate of return on a stock. This is the minimum return required by the investors to invest in a stock based on its systematic risk, the market's risk premium and the risk free rate.  

The formula for required rate of return under CAPM is,

r = rRF + Beta * rpM

Where,

  • rRF is the risk free rate
  • rpM is the market return

r = 0.06 + 2.5 * 0.07

r = 0.235 or 23.5%

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Coyne Corporation is evaluating a capital investment opportunity. This project would require an initial investment of $30,000 to
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Answer:

A. $41,120.

Explanation:

Year    Description          Cash flow           Present [email protected]%

0       Equipment cost      ($30,000)                    ($30,000)

1-4      Additional CF           $24,000                    $69,929.10

4        Residual value            $2,000                       $1,184.16

Present value total                                                 $41,113.26

Based on the above calculation, the answer shall be A. $41,120.

8 0
4 years ago
The Lend-Lease Bill, introduced in Congress: Group of answer choices authorized the president to sell, transfer, lend, lease, or
tankabanditka [31]

Answer:

Authorized the president to sell, transfer, lend, lease, or otherwise dispose of other equipment and supplies to any country whose defense the President deems vital to the defense of the United States.

Explanation:

Lend-Lease Act

This bill was said to come into existence on 11th of March, 1941. The Congress passed the Lend-Lease Act. The legislation gave the President at that time, President Franklin D. Roosevelt the right, powers to sell, transfer, exchange, lend equipment to any country to help it defend itself against the other powers.

It was said that with the Lend-Lease bill stated that country of any kind whose defense the President thinks is very important to the defense of the United States will be given or can be able to receive military equipment, supplies, and other necessary materials even if that country is unable to generate funds to pay for those items.

6 0
3 years ago
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Alenkinab [10]
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7 0
3 years ago
On June​ 1, Addison Company purchased $ 10,000 of inventory on account from Garrison Company. Garrison offers a 4​% discount if
IRINA_888 [86]

Answer:

c. a debit to Inventory for $10,000

Explanation:

Whenever goods are purchased on a discount to be received on payment basis, the inventory is first recorded at cost.

Also as per the general rule, discount is a kind of income, and incomes are recorded only when earned, therefore, the cost of inventory shall be reduced by 4% only when the payment is made, therefore the inventory on the date of purchase shall be recorded at $10,000 only and not for $9,600.

Thus, correct option is c

4 0
3 years ago
The U.S. Supreme Court case United States v. Bagley compels the prosecution to disclose any evidence that the _________ requests
nikdorinn [45]

Hello,

Question - The U.S. Supreme Court case United States v. Bagley compels the prosecution to disclose any evidence that the _________ requests.

Answer - "evidence that the defense requests"

Why - "Bagley claimed that the government had violated his due process rights by withholding evidence that the defense could have utilized to impeach the witnesses. The district court held that the evidence was not material because the outcome would have been the same. "


6 0
3 years ago
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