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dexar [7]
3 years ago
6

Given an expected market return of 12.0%, a beta of 0.75 for Benson Industries, and a risk-free rate of 4.0%, what is the expect

ed return for Benson Industries?
Business
1 answer:
omeli [17]3 years ago
8 0

Answer:

Re = 10%

Explanation:

using the CAPM formula, the cost of equity is:

Re = risk free + (beta x market premium)

  • risk free = 4%
  • market premium = market return - risk free = 12% - 4% = 8%
  • beta = 0.75

Re = 4% + ((0.75 x 8%) = 10%

Since the beta is lower than 1, this stock is less volatile than the market, that is why the required rate of return is lower than the market return.

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The Securities and Exchange Commission: Multiple Choice verifies the accuracy of the information contained in the prospectus. pu
nasty-shy [4]

Answer:

reviews registration statements to ensure they comply with current laws and regulations.

Explanation:

The Securities and Exchange Commission (SEC) is a governmental agency saddled with the sole responsibility of regulating the securities or capital markets, as well as protecting investors in a country.

In the United States of America, the Securities and Exchange Commission (SEC) as an independent government agency was established under the Securities Act of 1933 and the Securities and Exchange Act of 1934 of the United States of America. It has the power to propose securities rules and regulations, and enforce federal securities law in the securities market.

<em>Hence, Securities and Exchange Commission reviews registration statements of bond issuers, investment advisers etc, to ensure they comply with current laws and regulations.</em>

5 0
3 years ago
Mayan company had net income of $33,250. the weighted-average common shares outstanding were 9,500. the company sold 4,500 share
mylen [45]

The company’s earnings per share would still be based on the common shares outstanding of 9,500. This is because the 4,500 selling transaction is not yet accounted for that last accounting period. Therefore,

Earnings per share = $33,250 / 9,500 shares

Earnings per share = $3.5 per share

5 0
3 years ago
Read 2 more answers
Owen is a barista at a coffee shop. His manager has noticed that he has been showing up late for work, getting coffee orders wro
Dahasolnce [82]

Answer:

The correct way to act is to talk to the person and try to help him to resolve the problems, in the case he can not, then look for other actions. This process of talking and being comprehensive with the person gives a very good image of the company in the eyes of the other workers and the press.

Explanation:

To begin with, the proper action that the manager should take is to talk to Owen and nicely tell him about the situation that the manager noticed and ask him if there is a problem that could be fixed or if the manager could give him help in any way in order to let Owen do his job properly again as before. Moreover, if Owen states the problem then the next step will be to seek for posible solution to those problems, as well as given the employee encouragement and calmness regarding the fact that the company understands and wants Owen to resolve his problem so he can work correctly again. Finally, once done that, the final step will be to control the employee afterwards to see if he works normaly again and take new actions in the case that he is not.

8 0
3 years ago
A company has 10,000 shares of $10 par common stock outstanding. Prepare entries to record the following: (a) Purchased 1,500 sh
solmaris [256]

Answer:

Treasury Stock          24,000

              Cash                           24,000

to record puchase of own shares (A)

Cash                           19,000

      Threasury Stock               16,000

      Additional Paid-in TS        3,000

to record reissued shares aboe their price (B)

equipment               80,000

       Cash                               25,000

      Common Stock              40,000

       Additional Paid-in          15,000

to record purchase of equipment (C)

Cash                                   7,000

Additional Paid-in TS         1,000

             Treasury Stock                  8,000

to record reissued shares below their price (D)

Explanation:

(A) under cost method, treasury stock enter the accounting at their cost.

Inthis case is 1,500 shares times $16

(B) When reissued above their cost the shares will generate a additional paid in

Cost:

1,000 shares x $16 = 16,000

Sales price:

1,000 shares x $19 = 19,000

Difference:

19,000 - 16,000 = 3,000

(C) The equipment enter the accounting for his cost. Because, the face value of the stock is not enought for the equipment, we recognize an additional paid-in

equipment 80,000

cash           (25,000)

common stock

4,000 x 10  (40,000)

<em>Subtotal       15,000</em>

To cover this we use the additional paid-in

(D) We decrease the additional paid-in for the diference between cash proceeds and the treasury stock:

cash       14 x 500 = 7,000

Ts           16 x 500 =(8,000)

We decrease the previous additional paid-in TS declare on (B)

6 0
3 years ago
Tom and Jerry's has 2.4 million shares of common stock outstanding, 2.4 million shares of preferred stock outstanding, and 14.00
3241004551 [841]

Answer:

Tom and Jerry's

The weight used for common stock in the computation of Tom and Jerry's WACC is:

= 45.22%

Explanation:

a) Data and Calculations:

                                               Common   Preferred    Bonds

                                                  Stock         Stock

Outstanding number               2.4 m         2.4 m         14,000

Market price per share           $13.40      $10.40         $999.6

Total value                               $32.16 m  $24.96 m    $13,994,400

Total value of stock and bonds = $71,114,400

Weight of common stock = $32.16/$71.1144 * 100 = 45.22%

6 0
3 years ago
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