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Alika [10]
3 years ago
12

Company Company A Company B Forecasted return 7% 11% Standard deviation of returns 8% 23% Beta 1 3 The market risk premium is 6%

and the risk-free rate is 3%. Using Capital Asset Pricing Model (CAPM), will you invest in the companies
Business
1 answer:
Olin [163]3 years ago
3 0

Answer and Explanation:

The computation is shown below:

As we know that

Required rate of return = Risk Free Rate +  Beta × (Market Return -Risk Free Rate)

For company A

= 3% + 1 × 6%

= 9%

For Company B

= 3% + 3  ×  6%

= 21%

As we can see that the forecast return should be lower than the required return so we should not invest in company A also the same is done in company B too

Therefore we dont invest in any of the company

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Wildhorse Corp. has total current assets of $12,152,000, current liabilities of $5,849,000, and a quick ratio of 0.94. How much
White raven [17]

Answer:

Wildhorse Corp. has inventory of $6,653,940

Explanation:

The quick ratio is a liquidity ratio that indicates a company's ability to pay its current liabilities when they come due without needing to sell its inventory or get additional financing. The quick ratio is calculated by the following formula:

Quick ratio = (Cash & equivalents + Short Term investments + Accounts receivable)/Current Liabilities

(Cash & equivalents + Short Term investments + Accounts receivable) = Quick ratio x Current Liabilities = 0.94 x $5,849,000 = $5,498,060

Inventory = Total current assets - (Cash & equivalents + Short Term investments + Accounts receivable) = $12,152,000 - $5,498,060 = $6,653,940

4 0
3 years ago
What purpose does tesla serve in the economy?
grandymaker [24]

Tesla has created over 1,500 jobs at its ATVM-supported facilities. The Department of Energy's investment in Tesla supports the commercial deployment of advanced technologies that help U.S. automakers remain competitive in the growing global advanced vehicle market. This is the purpose of tesla serving the economy.

The economy is the field of production, distribution, trade and consumption of goods and services. Generally, it is defined as a social domain emphasizing practices, discourses, and material expressions related to the production, use, and management of scarce resources.

Learn more about the economy here:brainly.com/question/1106682

#SPJ4

8 0
2 years ago
Pat Jones is a college student who is planning some networking opportunities for the current l semester. Pat wanted to look
DaniilM [7]

Answer:

1. I feel like Pat's new strategy isn't ethical. Pat doesn't pay for the suits; he just buys them and then returns them. Pat benefits, but the store he gets the suits from doesn't. In fact, they are harmed from this transaction because they are unable to have the suit for others to buy while Pat has it. There could be consequences with this strategy. For example, the suit might be damaged, and Pat won't be able to return it. Another problem is that others might find out about Pat's strategy, and they might view them as unprofessional. This is a problem for Pat since the reason Pat wore those suits was to look professional.

2. The stores are harmed from this transaction. They are unable to sell the suits to other buyers. The stores lose potential customers, so the stores lose potential money.

3. The companies should record that Pat had bought the suit only to return it the next day, so that they can act accordingly when Pat or someone else comes back to "buy" a suit.

Explanation:

7 0
3 years ago
In the year 2020, a divorced woman under age 50 collects $50,000 of alimony and child support as her sole source of income. The
NikAS [45]

The available options are:

A. No contribution can be made because the woman does not have earned income

B. A contribution of up to $6,000 is permitted, but the contribution is not tax deductible.

C. A tax deductible contribution of up to $7,000 is permitted

D. A tax deductible contribution of up to $9,000 is permitted

Answer:

No contribution can be made because the woman does not have earned income

Explanation:

Unlike in the previous years before 2019, concerning divorce agreements, alimony is now declared to be no longer deductible by the payor and at the same time is considered to be a tax-free income to the recipient. In essence, this indicates that alimony is no longer qualifies as earned income and therefore, cannot be utilized to fund an Individual Retirement Account.

Hence, in this case, since it is , year 2020, the correct answer is "No contribution can be made because the woman does not have earned income."

8 0
3 years ago
When Home Movies Inc. opened stores in other countries, it increased the company's international market share. Home Movies took
olga55 [171]

Answer:

<h2>In this instance,Home Movies Inc. took advantage of market expansion opportunity to enhance market share.Hence,the correct answer is market expansion.</h2>

Explanation:

In Microeconomics,the practice of market expansion refers to the enhancement of business activities or selling of goods and services into newer sections of the market which encompasses factors such as demographic,economic,geographical,social etc.In this context,the geographical expansion of market can possibly include international markets as well as long it can comprehensively cover the desired consumer group which can lead to higher revenue generation and potential market share.It is an extremely formidable economic strategy for any business organisation or company to expand the consumer accessibility by tapping into new geographical areas in the global or international market.An effective market expansion,however, requires a thorough and considerable market research with a specific emphasis on the the potential new markets that the existing business can easily reach and the new consumer base in those markets who will most probably like the products and/or services sold by the business based on various preferential attributes.This can evidently generate immense opportunities for sales and overall economic growth.

6 0
3 years ago
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