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Citrus2011 [14]
3 years ago
13

The stock of Big Joe's has a beta of 1.64 and an expected return of 13.30 percent. The risk-free rate of return is 5.8 percent.

What is the expected return on the market?
Business
1 answer:
larisa86 [58]3 years ago
7 0

Answer:

expected return on market = 0.10373 or 10.373%

Explanation:

Using the CAPM, we can calculate the required/expected rate of return on a stock. This is the minimum return required by the investors to invest in a stock based on its systematic risk, the market's risk premium and the risk free rate.  

The formula for required rate of return under CAPM is,

r = rRF + Beta * rpM

Where,

  • rRF is the risk free rate
  • rpM is the market risk premium

We will first calculate the market risk premium using the required rate of return for stock, beta and risk free rate and plugging these values in the formula above.

0.1330 = 0.058 + 1.64 * rpM

0.1330 - 0.058 = 1.64 *rpM

0.075 = 1.64 * rpM

rpM = 0.075 / 1.64

rpM = 0.04573 or 4.573%

As we know that the beta for market is always equal to 1, we can calculate the rate of return for market as,

expected return on market = 0.058 + 1 * 0.04573

expected return on market = 0.10373 or 10.373%

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Pursuant to a contract, a landscaper performed $30,000 of landscape work for a homeowner. By coincidence, the homeowner and the
vfiekz [6]

Answer:

NO, court does not have subject matter jurisdiction over the landscaper's contract claim

Explanation:

given data

landscape work =  $30,000

seeking  in damages = $100,000

solution

landscaper assert and maintain claim against an home owner for breach of contract is no because court have diversity of an citizenship in the jurisdiction over an home owner for negligence claims .  

we know that Federal Rule of Civil Procedure permit only counter claims and  federal court have not any subject matter jurisdiction over an landscaper contract claims

6 0
3 years ago
Purvell Corporation has just acquired a new machine with the following characteristics (Ignore income taxes.): Cost of the equip
jarptica [38.1K]

Answer:

18.75%

Explanation:

Calculation to determine what The simple rate of return would be closest to:

First step is to calculate the Depreciation using this formula

Depreciation = (Cost - Salvage value)/ life

Let plug in the formula

Depreciation= ($50,000-$5000)/8 years

Depreciation=$40,000/8

Depreciation=$5,625

Second step is to calculate the annual net cash savings:

Annual cash savings $15,000

Less: Depreciation ($5,625)

(45,000/8 = $5,625)

Annual net cash savings $ 9,375

($15,000-$5,625)

Now let calculate the Simple rate of return

Using this formula

Simple rate of return = Annual net cash savings / Initial investment

Let plug in the formula

Simple rate of return= $9,375/$50,000

Simple rate of return= 18.75%

Therefore The simple rate of return would be closest to:18.75%

4 0
3 years ago
Lori, head of Accounting, refused to sign Brian’s parental leave request. Brian is seeking 12 weeks of paid leave to care for hi
Setler79 [48]

No,Brain cannot able sue for wrongful termination and prevail for parental leave request

Explanation:

As per the Family and Medical Leave Act of 1993 requires 12 weeks of unpaid leave annually for the employees who delivered a new born baby. Under this law, legal parents are protected for up to 12 weeks of unpaid leave per year. The act ensures the job security of parents/employees but does not protect employees who go on paid leave with their employers.

The law clearly states that .,only unpaid leave can be taken by the employees as parental leave for 12 weeks. But in this situation Brain ask Lori for paid leave  which is cannot be availed as per law.So Lori has the rights to refuse to sign Brian’s parental leave request.

5 0
3 years ago
If current assets are $110,000 and current liabilities are $50,000, working capital will be:
pantera1 [17]

Hello!

Working capital=current assets-current liabilities

Working capital=110000-50000
Working capital=60000

Good luck!

6 0
3 years ago
What would be the effect on the accounts if the business purchased equipment on account?
Serjik [45]

Answer:

A. An asset would be debited and a Liability credited.

Explanation:

Purchasing on account means buying on credit. The debts of the business increase. As a result,  liabilities increase.

Equipment is a business asset. Purchasing equipment increases assets.

In the double-entry accounting system, An increase in an asset is recorded by debiting the asset account. An increase in liabilities is captured by crediting the liabilities account.

3 0
3 years ago
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