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Sauron [17]
3 years ago
13

The Treasury bill rate is 5%, and the expected return on the market portfolio is 10%. According to the capital asset pricing mod

el:
Required:
a. What is the risk premium on the market?
b. What is the required return on an investment with a beta of 1.5?
c. If an investment with a beta of 0.7 offers an expected return of 8.0%, does it have a positive or negative NPV?
d. If the market expects a return of 11.5% from stock X, what is its beta?
Business
1 answer:
alexdok [17]3 years ago
6 0

Answer:

a) Re = Rf + [beta x (Rm - Rf)

10% = 5% + [1 x (Rm - 5%)]

5% = Rm - 5%

Rm = 10%

risk premium = Rm - Rf = 5%

b) Re = 5% + (1.5 x 5%) = 12.5%

c) Re = 5% + (0.7 x 5%) = 8.5%

since Re is lower than the expected return of the project, the NPV is positive.

d) 11.5% = 5% + (beta x 5%)

6.5% = beta x 5%

beta = 6.5% / 5% = 1.3

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Javier represents Marcus, who's selling his rental property to Ben. Ben is represented by another real estate licensee, Francis.
Ivenika [448]

Answer:

Customer

Explanation:

A customer is a person that buys goods or services from another person, shop, business, organization, etc. with the aid of a financial transaction or other considerable.

A customer can also be defined as the receiver of goods and/or services from vendor, salesman/woman, etc. with the use of a medium of exchange like money or some other medium of exchange.

Cheers.

4 0
3 years ago
Below are several transactions for Scarlet Knight Corporation. A junior accountant, recently employed by the company, proposes t
azamat

Answer:

Scarlet Knight Corporation

Correct postings:

Accounts                 Debit    Credit

1. Cash                    12,500

  Common Stock                 12,500

2. Cash                     3,500

   Service Revenue               3,500

3. Supplies                 250

  Cash                                      250

4. Rent Expense       550

   Cash                                    550

5. Equipment         1,950

   Cash                                 1,950

Explanation:

a) Data and Calculations:

Accounts                 Debit    Credit

1. Common Stock    12,500

  Cash                                   12,500

2. Cash                     3,500

   Service Revenue               3,000

3. Supplies                 250

  Cash                                      250

4. Rent Expense       550

   Cash                                    550

5. Cash                   1,950

   Equipment                        1,950

b) The accounting rule is to debit the value receiver and to credit the value giver.  Generally, assets, expenses, and losses normally have debit balances while liabilities, equities, incomes, and gains have credit balances.

4 0
3 years ago
Would you expect bacteria to grow at the same rate for decades?
OverLord2011 [107]
It depends on many factors, mainly things like nutrient availability, temperature, moisture level, and toxin rate produced by the bacteria. can the bacteria move, or is it an enclosed space like a petri dish? but basically if we're talking about decades, bacteria will most likely not grow at the same rate in nature. in a controlled environment, the answer would be a maybe.
7 0
4 years ago
Wat is de boekwaarde
posledela

Answer:

I dont understand the question

Explanation:

imma get some points for posting the answer i will post randoms aswell so others can get points to answer more questions bahah

8 0
3 years ago
Read 2 more answers
Calculate the value of a preferred stock that pays a dividend of ​$6.50 per share when the​ market's required yield on similar s
ser-zykov [4K]

Answer:

In order to find the value of a preferred stock we discount its future payments at the required yield on the stock. Because the preferred stock is perpetual in nature, meaning it pays the same amount forever, we can find it's value by dividing its dividend by its required yield. So in this case the dividend is 6.5 and the required yield is 14% so the value of the preferred stock is

6.5/0.14= $46.42

Explanation:

4 0
3 years ago
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