Expected return of the stock is greater than 12%.
Using formula, Risk free rate + beta (market risk rate - risk free rate)\
= 2% + 2.0 (7%-2%)
= 13.6 - 0.4* risk premium
Risk premium of a stock is greater than 12%.
A stock's total return takes into account both capital gains and losses as well as dividend income, as opposed to a stock's nominal return, which only displays its price movement. In addition to considering the actual rate of return, investors should consider their ability to withstand the risk involved with a given investment. An investment's return on investment (ROI) provides a general indication of its profitability. The return on investment (ROI) is calculated by subtracting the investment's initial cost from its final value, dividing the result by the cost of the investment, and finally multiplying the result by 100.
Note that the full question is:
If the market risk premium is 7%, the risk-free rate is 2% and the beta of a stock is 2.0, what is the expected return of the stock?
A. less than 12%.
B. 12%.
C. greater than 12%.
D. cannot be determined.
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Answer:
Direct material= $5,600
Explanation:
<u>First, we need to calculate the direct labor added to Work in Process:</u>
Direct labor= allocated overhead / predetermined overhead rate
Direct labor= 6,400 / 0.8
Direct labor= $8,000
<u>Now, by difference, the direct materials:</u>
Direct material= Ending balance - allocated overhead - direct labor
Direct material= 20,000 - 6,400 - 8,000
Direct material= $5,600
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Answer:
102.99 hours needed
Explanation:
Zu = K (U^n)
Zu= estimation of tower which is for 8
U= number of tower which is 8
n= log0.94/log2
Given the table below
![\begin{tabular} {|p {1cm}|p {1.4cm}|p {1.4cm}|p {1.5cm}|p {1.4cm}|p {1.4cm}|} {Price per hour&Quantity Supplied by Ann&Quantity Supplied by Bob&Quantity Supplied by Carlos&Market Quantity Supplied&Market Quantity Demanded\\[1ex] \$50&94&35&19&148&5\\ 45&93&33&14&140&8\\ 40&90&30&10&130&11\\ 35&81&27&6&114&16\\ 30&68&20&2&90&22\\ 25&50&12&0&62&30\\ 20&32&7&0&39&39\\ 15&20&0&0&20&47\\ 10&10&0&0&10&57 \end{tabular}](https://tex.z-dn.net/?f=%5Cbegin%7Btabular%7D%0A%7B%7Cp%20%7B1cm%7D%7Cp%20%7B1.4cm%7D%7Cp%20%7B1.4cm%7D%7Cp%20%7B1.5cm%7D%7Cp%20%7B1.4cm%7D%7Cp%20%7B1.4cm%7D%7C%7D%0A%7BPrice%20per%20hour%26Quantity%20Supplied%20by%20Ann%26Quantity%20Supplied%20by%20Bob%26Quantity%20Supplied%20by%20Carlos%26Market%20Quantity%20Supplied%26Market%20Quantity%20Demanded%5C%5C%5B1ex%5D%0A%5C%2450%2694%2635%2619%26148%265%5C%5C%0A45%2693%2633%2614%26140%268%5C%5C%0A40%2690%2630%2610%26130%2611%5C%5C%0A35%2681%2627%266%26114%2616%5C%5C%0A30%2668%2620%262%2690%2622%5C%5C%0A25%2650%2612%260%2662%2630%5C%5C%0A20%2632%267%260%2639%2639%5C%5C%0A15%2620%260%260%2620%2647%5C%5C%0A10%2610%260%260%2610%2657%0A%5Cend%7Btabular%7D)
From the table it can be seen that at the price of $20, the quantity supplied is equal to the quantity demanded equal to 39.
Also notice that at that price, Carlos is not supplying any service.
Therefore, the equilibruim price <span>of tutoring services be if Carlos decided to stop tutoring is $20.</span>
