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disa [49]
3 years ago
9

Assume that the risk-free rate of interest is 6% and the expected rate of return on the market is 16%. I am buying a firm with a

n expected perpetual cash flow of $1,000 but am unsure of its risk. If I think the beta of the firm is .5, when in fact the beta is really 1, how much more will I offer for the firm than it is truly worth?
Business
1 answer:
algol [13]3 years ago
5 0
This wouldn’t by chance have multiple choice options would it?
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25 points and will mark brainliest!!!
Arada [10]

Explanation:

Let x be the price of an adult ticket.

Then 0.5x is the price of a child ticket.

We have 2x + 4(0.5x) = £152, therefore 4x = £152 and x = £38.

Hence the price of an adult ticket is £38.

8 0
3 years ago
Dallas Company uses a job order costing system. The company's executives estimated that direct labor would be $3,990,000 (190,00
forsale [732]

Answer:

The predetermined overhead rate was $7.84

Explanation:

Predetermined overhead rate is calculated by dividing the Expected overhead by the Expected level of activity on which the overhead is applied. It is a rate at which the overhead is applied to a product / project/ department.

Predetermined overhead rate = Expected overhead / Expected activity

Predetermined overhead rate = Expected overhead / Expected direct labor hours

Predetermined overhead rate = $1,490,000 / 190,000

Predetermined overhead rate = $7.84 per labor hour

4 0
3 years ago
Read 2 more answers
In accounting, expenditures recorded as assets are said to be _____.
artcher [175]
they are said to be capitalized.


hope this helps! please mark brainliest if possible:)
8 0
3 years ago
Paul Corporation reported net income of $260,000 during the current calendar year. The company had 10,000 common shares outstand
uysha [10]

Answer:

the company’s basic EPS is $37.14

Explanation:

Basic Earnings per share = Earnings attributable to holders of common stock ÷ Weighted Average Number of Common Stocks

<u>Step 1 : Calculation of Earnings attributable to holders of common stock</u>

This is given. It is the Net Income during the current year of $260,000

<u>Step 2 : Calculation of Weighted Average Number of Common Stocks</u>

Outstanding Stocks at the beginning of the year                 10,000

Less Sold Stocks - On Weight Basis (6/12 × 6,000)               3,000

Weighted Average Number of Common Stocks                    7,000

Therefore,

Basic Earnings per share = $260,000 ÷ 7,000

                                           = $37.14

8 0
3 years ago
A server expects a group of poorly dressed customers to be stingy tippers and gives them poor service, so he gets the result tha
Harlamova29_29 [7]
The answer to the given blank above is SELF-FULFILLING PROPHECY. From the term itself, self-fulfilling prophecy refers is a kind of prediction made by someone which most likely becomes true, may it be directly or indirectly. Usually, this is a result of both belief and behavior. In the given scenario above, the waiter, serving poorly dressed customers, predicts that he is going to be tipped low and so he gives them bad service. As a result, he did really get a smaller tip, just as he expects or believes.
8 0
3 years ago
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