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jenyasd209 [6]
3 years ago
7

"Given the following information from Cullumber Corporation, what price would the CAPM predict that the company’s stock will tra

de for one year from today? (Do not round intermediate calculations. Round final answer to 2 decimal places, e.g. 50.75.) Risk free rate: 3.6 % Market risk premium: 8.6 % Beta: 0.65 Current stock price: $64.60 Annual dividend: $1.84"
Business
1 answer:
Natasha_Volkova [10]3 years ago
5 0

Answer:

$68.70

Explanation:

Risk free rate: 3.6 %

Market risk premium: 8.6 %

Beta: 0.65

Current stock price: $64.60

Annual dividend: $1.84

The expected rate of return = 3.6% + 0.65*8.6%

The expected rate of return = 0.036 + 0.0559

The expected rate of return =  0.0919

The expected rate of return = 9.19%

Required return = (P1-P0+Dividends)/P0

9.19% =  [(Price + 1.84)/64.60 ] - 1

9.19% + 1 = (Price + 1.84)/64.60

64.60*(0.0919 + 1) = Price + 1.84

70.53674 = Price + 1.84

Price = 70.53674 - 1.84

Price = $68.69674

Price = $68.70

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If the consumption of a good generates positive externalities, then which of the following is correct? The government can subsid
vekshin1

Answer:

Both of these answers are correct.

Explanation:

Positive externality is when the benefits of economic activities to third parties exceeds its cost.

Activities that generate positive externality are

1. Education

2. Research and development

To encourage activities that have positive externality, government can subsidise such activities. Subsidies makes the activity cheaper and incentivise people to carry out such activities.

Market forces may lead to an underallocation of resources to producing the good. Therefore, the government might intervene in the allocation of the resources to increase efficiency.

I hope my answer helps you.

4 0
3 years ago
The Allowance for Bad Debts has a credit balance of $ 9 comma 500 before the adjusting entry for bad debts expense. After analyz
Natali5045456 [20]

Answer:

$5,500

Explanation:

When a company makes sales on account, debit accounts receivable and credit sales. Based on assessment, some or all of the receivables may be uncollectible.  

To account for this, debit bad debit expense and credit allowance for doubtful debt. Should the debt become uncollectible (i.e go bad), debit allowance for doubtful debt and credit accounts receivable.

Adjustments to allowance required

= $15,000 - $9,500

= $5,500

The entries to be posted are

Debit Bad debt $5,500

Credit Allowance for Doubtful debt $5,500

6 0
3 years ago
Suppose you and a classmate are playing a game where your classmate proposes a division of​ $1.00. ​ Then, you either accept or
pochemuha

Answer: The correct answers are "A. Accept" and "$ 0.01".

Explanation: Given that we talk about optimal strategy when maximizing the expected profit by the player:

In the first case It is convenient to accept the proposal and keep $ 0.12, instead of rejecting it and running out of nothing.

And in the second case it is convenient to give the classmate as little as possible so that he accepts and we have a greater profit.

4 0
3 years ago
In determining contract formation, what is the overriding focus of the uniform commercial code (ucc)?
postnew [5]

Answer:

The intent of the parties is to be bound by the contract.

<h3>What is the UCC battle of the forms rule?</h3>
  • Typically these so-called battles of the forms occur when a buyer and seller of goods exchange pre-printed order forms with their own different terms on the back and then proceed with the transaction without ever signing any final contract or reaching an agreement on the terms of the deal.

To learn more about it, refer

to brainly.com/question/24553900

#SPJ4

7 0
1 year ago
A business school would like to know that whether the average number of years of work experience of MBA applicants is less than
VMariaS [17]

Answer:

The test statistic t of the sample is -0.804.

There is sufficient evidence to ascertain that the average number of years of work experience of MBA applicants is less than 3 years.

Explanation:

Null hypothesis: The average number of years of work experience of MBA applicants is 3 years.

Alternate hypothesis: The average number of yet of work experience of MBA applicants is less than 3 years.

Test statistic (t) = (sample mean - population mean) ÷ sd/√n

sample mean = 2.57

population mean = 3

sd = 3.67

n = 47

t = (2.57 - 3) ÷ 3.67/√47 = -0.43 ÷ 0.535 = -0.804

Assuming a 5% significance level

degree of freedom = n - 1 = 47 - 1 = 46

The critical value corresponding to 46 degrees of freedom and 5% significance level is 2.013.

Conclusion:

Reject the null hypothesis because the test statistic -0.804 is less than the critical value 2.013.

The years of work experience of MBA applicants is less than 3.

5 0
3 years ago
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