Barrowing generally slows an economy down because barrowers must pay interest as well as returning the principal of the loan

A company's common stock shares are expected to bring a 13 % return to their investors in case of "recession" state of the econo

Ludmilka [50]

Answer:

The expected rate of return is 8.65%

Explanation:

The expected return on a stock can be calculated by multiplying the return in each scenario by the probability of that scenario. This will provide the expected value of the return based on all these scenarios. Thus, the rate of return is,

Rate of return = rA * pA + rB * pB + rC * pC

Where,

r represents the return in each scenario
p represents the probability of each scenario

The probability of normal state is = 1 - 0.45 - 0.05 = 0.5

Rate of return = 0.13 * 0.45 + 0.06 * 0.5 + (-0.04) * 0.05

Rate of return = 0.0865 or 8.65%

3 0

3 years ago

When band-aid decided to expand into ointments, gauze, tape, and antibiotic treatments, the company engaged in what type of bran

Margaret [11]

I would say this brand would be to do with having a line of goods ie for related goods, not just for one item but a number of related items so that their buyers will have much more to choose from and their sales should improve significantly.

8 0

4 years ago

Jack's Construction Co. has 80,000 bonds outstanding that are selling at par value. Bonds with similar characteristics are yield

zheka24 [161]

Answer:

WACC 10.42614%

Explanation:

<u>First we use CAPM to solve for the cost of equity</u>

$Ke= r_f + \beta (r_m-r_f)$

risk free 0.04

market rate

premium market (market rate - risk free) 0.08

beta(non diversifiable risk) 1.1

$Ke= 0.04 + 1.1 (0.08)$

Ke 0.12800

Then we calculate the WACC (weighted average cost of capital)

$WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})$

D 80,000 bonsd x 1,000 = 80,000,000

E 4,000,000 shares x 40 = 160,000,000

E+ D 80,000,000 + 160,000,000 = 240,000,000

equity weight: 2/3

liability weight: 1/3

Ke 0.128

Equity weight 0.6667

Kd 0.086

Debt Weight 0.3334

t 0.34

$WACC = 0.128(0.6667) + 0.086(1-0.34)(0.3334)$

WACC 10.42614%

6 0

3 years ago

a rational decisionmaker takes an action if and only if the marginal cost exceeds the marginal benefit.

Mariulka [41]

The only time a rational decision maker will choose an action is when the marginal utility of the activity is greater than the marginal cost of the action. Option A

This is further explained below.

<h3>A rational decisionmaker takes an action if and only if:?</h3>

The marginal cost is a term that refers to the change in the total cost that takes place as a direct consequence of an increase in the quantity of a product or service that is produced.

In the field of economics, this phrase refers to the amount of money that must be spent in order to produce one more unit of output.

In conclusion, if the marginal benefit of the action is greater than the marginal cost of the action, then the action will be conducted by a rational actor if there is a positive expectation that the action will have a net positive outcome. Alternative A

Read more about marginal cost

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CQ

A rational decisionmaker takes an action if and only if:

a) The marginal benefit of the action exceeds the marginal cost of the action

b) The marginal cost of the action exceeds the marginal benefit of the action,

c) The marginal cost of the action is zero,

d) The opportunity cost of the action is zero

7 0

1 year ago

True or false: retained earnings equals net income plus distributions to shareholders.

Goshia [24]

Retained earnings equals net income plus distributions to shareholders. False.

<h3>What is retained earnings?</h3>

Retained earnings is the cumulative profit of a company after distributions to shareholders (dividends) have been accounted for. Retained earnings is net income less dividends.

The formula used to determine retained earnings is :

Retained earnings = beginning of period retained earnings + net income - dividends.

To learn more about retained earnings, please check: brainly.com/question/14529006

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6 0

2 years ago