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Alenkinab [10]
3 years ago
12

If the expected rate of return on the market portfolio is 12% and T-bills yield 6%, what must be the beta of a stock that invest

ors expect to return 10%?
Business
1 answer:
DENIUS [597]3 years ago
8 0

Answer:

the beta of the stock is 0.67

Explanation:

The computation of the beta of the stock is shown below

As we know that

As per CAPM model

Expected rate of return = risk free rate + beta × (market rate of return - risk free rate)

0.10 = 0.06 + beta × (0.12 - 0.06)

Beta = 0.04 ÷ 0.06

= 0.67

Hence, the beta of the stock is 0.67

We simply applied the above formula so that the correct value could come

And, the same is to be considered

You might be interested in
Maso Company recorded journal entries for the issuance of common stock for $200,000, the payment of $65,000 on accounts payable,
cricket20 [7]

Answer:

Increase of $95,000

Explanation:

Stockholder equity: It records the issue of shares, retained earnings, and deduct the dividend amount if declared.

The expenses which are related to the business is directly or indirectly affect the stockholder equity.

So, the net effect is shown below:

Issuance of common stock = $200,000

Less - Payment of salaries expense = $105,000

So, the net effect would be equal to

= $200,000 - $105,000

= $95,000

The accounts payable does not affect stockholder equity. So, it would not be considered.

This $95,000 would increase stockholder equity.

7 0
4 years ago
Select the correct answer. Which form of relativism states that people rely on their own standards of right and wrong when makin
Sladkaya [172]

E. Naive relativism

Explanation:

Naive relativism is based on the belief that humans ha e a deep seated view of what is right and what is wrong and can judge things by their own standards and make a decision.

<u>These decisions are thus treated as truth derived from one's own self by the person who is concerned. </u>

Naive relativism means that people also project their sense of right and wrong over others and sort of treat it as if it is universal.

7 0
3 years ago
Inacio Corporation uses the weighted-average method in its process costing system. Data concerning the first processing departme
hjlf

Answer:

$17.97 per unit

Explanation:

Using weighted average method, Equivalent units = Units that are completed during the period + Equivalent units in process at the end of period.

Equivalent units = 8,500 + 2,000*90%

Equivalent units = 8,500 + 1,800

Equivalent units = 10,300

Cost per equivalent unit for materials = (Beginning costs + Current costs) / Equivalent units

Cost per equivalent unit for materials = ($13,000 + $172,100) / 10,300 units

Cost per equivalent unit for materials = $185,100 / 10,300 units

Cost per equivalent unit for materials = $17.97 per unit

8 0
3 years ago
Identify the like terms.
Sedaia [141]

Answer:

Explanation:

7

+

5

−

9

+

2

−

1

2

7y+5x-9+2y-12x

7y+5x−9+2y−12x

Simplify

1

Combine like terms

7

+

5

−

9

+

2

−

1

2

{\color{#c92786}{7y}}+5x-9+{\color{#c92786}{2y}}-12x

7y+5x−9+2y−12x

9

+

5

−

9

−

1

2

{\color{#c92786}{9y}}+5x-9-12x

9y+5x−9−12x

2

Combine like terms

3

Rearrange terms

Solution

−

7

+

9

−

9

5 0
3 years ago
The employees of Mapes, Inc. were not happy with the management after a change in the board of directors. The new management did
Evgen [1.6K]

Answer:

Maintain employee relations

Explanation:

Employee relations can be defined as the relationship or cordiality that exists between employers and employees. Also known as industrial relations, employee relations is aimed at getting the employers to interact and provide the necessary environment and incentives to ensure that employees remain committed to their jobs.

From the above question, the lack of employee relations maintenance or employee relation breakdown was responsible for the dissatisfaction of the employees with the new board of directors as the lack of relations did not afford them the opportunity to have their needs addressed.

Employee relations is very important in any organization as it helps to keep the organization running smoothly as a result of the employees' commitment to their jobs and duties.

Cheers

4 0
3 years ago
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