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3 years ago

Assume that the risk-free rate is 6% and the market risk premium is 8%.

Business

1 answer:

valkas [14]3 years ago

4 0

Answer:

r or expected rate of return - market = 0.14 or 14%

r or expected rate of return - stock = 0.2120 or 21.20%

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 risk premium

Under CAPM, the assumption follows that the beta of the market is always equal to 1.

So, expected return on the stock market will be,

r or expected rate of return - market = 0.06 + 1 * 0.08

r or expected rate of return - market = 0.14 or 14%

The beta of the stock is given. We calculate the required rate of return on the stock to be,

r or expected rate of return - stock = 0.06 + 1.9 * 0.08

r or expected rate of return - stock = 0.2120 or 21.20%

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Answer:

$51,790

Explanation:

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Therefore the August cash disbursements for manufacturing overhead on the manufacturing overhead budget should be $51,790

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3 years ago

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Answer:

B. 1 and 2.

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3 years ago

Assume starbucks increased its spending on advertising by 35 percent to increase sales in its current markets. Which growth stra

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We can see here that if we assume that Starbucks increased its spending on advertising by 35 percent to increase sales in its current markets. The growth strategy this represents is: (d) Market penetration.

<h3>What is market penetration?</h3>

Market penetration actually refers to the success recorded by an organization or company in the selling of their goods and services to a specific market. Sales volume of the existing goods or services is actually used to measure market penetration.

The options that complete the question are:

(a) Market development

(b) Divesting

(d) Market penetration

(e) Product development

Thus, if Starbucks was able to increase its spending on advertising by 35 percent in order to increase sales in its current markets, then they had market penetration.

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2 years ago

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Answer:

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3 years ago

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What is considered a manufacturing worker?

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What are the positive impacts of manufacturing?

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