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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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Easton Co. deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of busines
Citrus2011 [14]

Answer:

See below

Explanation:

Given the above information, the adjusted cash balance should be;

Cash book balance

$67,209

Add:

Interest earned

$45

Less;

Bank fees

($30)

Adjusted cash book

$67,224

Bank balance

$63,949

Add:

Deposit in transit

$6,050

Less:

Outstanding checks

($2,675)

Adjusted bank balance

$67,324

7 0
3 years ago
you are saving $30 each month. you have a goal to accumulate $700 in savings. how long will it take you?
vredina [299]
<span>Goal = accumulate $700 in savings
</span><span>Saving = $30 a month
</span><span> To solve: Take the goal savings amount of $700 and divide the amount that is going into the savings monthly, $30 by it.
</span><span>$700/$30 = 23.33 months
</span><span>If sticking to a full month goal, it would take 24 months for the savings to be at $700. </span>
5 0
3 years ago
Read 2 more answers
During a typical evening, a pizzeria receives phone orders for pizza delivery at a constant rate: 18 orders in a typical 4 minut
liberstina [14]

Answer:

the phone order that will exceed $1000 end at 4+ 3hours 23mins = 7:23 PM

Explanation:

Given the following information for pizza delivery

phone orders : 18 orders in 4 minute.

1080 pies are sold in 4 hours

pizzeria starts taking orders at 4:00 PM

profit made = $11 on 10 orders.

When will phone order profit exceed $1,000?

phone orders : 18 orders in 4 minute.

1080 pies are sold in 4 hours

4.5 orders in 1 minute

profit made = $11 on 10 orders.

profit made = $1.1 on 1 orders.

for $1000 = 909.1 orders

at 910 orders the profit made will be $1001 (which > $1000)

therefore, our calculation of time will be base on 910 orders

18 orders in 4 minute

910 orders = 202.2 approximately 202min (which will be less than $1000)

therefore, we need to increase the order to the next minutes says 203 minutes.

913 orders = (913 * 4)/18 = 202.8mins = 3.38 hours = 3hours 23mins

in conclusion, the phone order will end at 4+ 3hours 23mins = 7:23 pm

5 0
3 years ago
Swifty Company incurred the following costs during the year: direct materials $24.40 per unit; direct labor $13.10 per unit; var
DerKrebs [107]

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Swifty Company incurred the following costs during the year: Direct materials $24.40 per unit

Direct labor $13.10 per unit

Variable manufacturing overhead $16.00 per unit

Variable selling and administrative costs $11.00 per unit

Fixed manufacturing overhead $132,000

Fixed selling and administrative costs $12,000.

Swifty produced 6,600 units and sold 6000 units.

A) Absorption costing= direct material + direct labor + variable overhead + fixed overhead

Absorption costing= 24.4 + 13.1 + 16 + (132,000/6,600)= $73.5

B) Variable costing= direct material + direct labor + variable overhead + Variable selling and administrative costs

Variable costing= 24.4 + 13.1 + 16 + 11= $64.5

4 0
3 years ago
A washer and a dryer cost $739 combined. the washer costs $39 more than the dryer. what is the cost of the dryer?
prisoha [69]
The drier costs $330.50
6 0
3 years ago
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