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irakobra [83]
3 years ago
7

The common stock of Jensen Shipping has an expected return of 16.2 percent. The return on the market is 11.2 percent, the inflat

ion rate is 3.1 percent, and the risk-free rate of return is 3.6 percent. What is the beta of this stock?
A. 1.33
B. 1.55
C. 1.44
D. 1.66
Business
1 answer:
tankabanditka [31]3 years ago
4 0

Answer: 1.66

Explanation:

Based on the information given in the question, the beta of the stock will be calculated as follows:

Expected return = 16.2%

Market return = 11.2%

Inflation rate = 3.1%

Risk-free rate of return = 3.6%

We should note that:

Expected return = risk-free rate + Beta × (market rate- risk-free rate)

Therefore,

16.2% = 3.6% + Beta × (11.2% - 3.6%)

16.2% = 3.6% + Beta × 7.6%

16.2% - 3.6% = Beta × 7.6%

12.6% = Beta × 7.6%

Beta = 12.6% / 7.6%

Beta = 1.66

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Answer:

True.

Explanation:

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3 years ago
The Blue Nile Law Firm prepays for advertising in the local newspaper. On January​ 1, the law firm paid $ 15 comma 000 for twelv
Arada [10]

Answer:

a. Cash basis $15,000

b. Accrual basis $2,500

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Under the cash basis of accounting, expenses are recorded or recognized in the books not necessarily when incurred but when cash is paid. This is not in line with the matching concept which requires that expenses be recognized the  period it is incurred as well as the resulting revenue.

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Alpha Technology produces two products: a high-end laptop under the label Excellent Laptops and an inexpensive desktop under the
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Answer:

Alpha Technology

Outstanding Computer's consumption ratio for setup hours is:

b. 0.48

Explanation:

a) Data and Calculations:

Overhead activities and costs:

Setting up equipment $3,000

Machining $15,000

                                            Excellent      Outstanding

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Direct Labor                         $25,000         $10,000

Direct Materials                   $20,000          $5,000

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Outstanding Computer's consumption ratio for setup hours = 75/155 * 100

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Answer:

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