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vazorg [7]
3 years ago
14

A firm has an equity beta of 1.2, the risk-free rate is 3.4 percent, the market return is 15.7 percent, and the pretax cost of d

ebt is 9.4 percent. The debt-equity ratio is .47. If you apply the common beta assumptions, what is the firm's asset beta
Business
1 answer:
Alik [6]3 years ago
5 0

Answer:

0.82

Explanation:

Calculation to determine the firm's asset beta

Using this formula

Firm's asset beta=Equity beta/(1+/D/E)

Let plug in the formula

Firm's asset beta=1.2/(1+0.47)

Firm's asset beta=1.2/1.47

Firm's asset beta=0.816

Firm's asset beta=0.82 (Approximately)

Therefore the firm's asset beta is 0.82

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On December 31, Strike Company has decided to discard one of its batting cages. The equipment had an initial cost of $236,300 an
Studentka2010 [4]

Answer:

Equipment, credit, $229,100

Explanation:

we record the entry when we purchase the equipment is

we debit the equipment, and credit the cash/accounts payable depending on whether we paid the cash or purchased the equipment on account.

We debit the equipment because equipment is our asset, and when asset goes up we debit them. We credit the cash because again cash is our asset and when asset goes down we credit them.

Now at the time of disposal, we want to remove the asset from our balance sheet. Equipment is disposed now. In other words, equipment is our asset, and disposing the equipment means asset goes down, and we show this effect by credit the equipment.

5 0
3 years ago
You believe that the spread between the september s&p 500 future and the s&p 500 index is too large and will soon correc
Dvinal [7]

You believe that the spread between the September s&p 500 future and the s&p 500 index is too large and will soon corrected. to take advantage of this mispricing, a hedge fund should <u>sell S&P 500 Index futures and buy all the stocks in the S&P 500.</u>

A fund is an investment allocated for a specific purpose. The fund's cash pool is often professionally invested and managed. Some common types of funds are pension funds, insurance funds, endowments, and endowments.

Funds are formed by pooling funds from multiple investors. A fund is a pool of funds available for a specific purpose. A professional manages the money and invests it in securities. Fund managers manage funds and use several strategies to effectively invest their funds.

Learn more about Funding here: brainly.com/question/25887038

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5 0
1 year ago
Board members of a nonprofit organization are calculating the salary offer for a new ceo. the board wants to ensure the salary p
lesya692 [45]

Answer:

nonprofit distributing

Explanation:

Based on the scenario being described within the question it can be said that the board members are practicing nonprofit distributing. This term refers to an organizational structure in which the profit the organization makes is reinvested in services to grow the business as opposed to being distributed to the shareholders. Which is what the company in this scenario is doing by using the money they have made in order to hire a new skillfull CEO.

3 0
3 years ago
Read 2 more answers
Brooks Company is a consulting firm and applies indirect overhead costs based on billing hours. The firm expects to have $75,000
valina [46]

Answer:

$2325

Explanation:

Indirect costs =75000/750=$100 per hour

Direct Labour = $55 per hour

Total cost per hour =100+55=$155

$155 ×15= $2325

The total cost for the consulting job for George Peterson is $2325

5 0
3 years ago
Molly Mocha employs one college student every summer in her coffee shop. The student works the five weekdays and is paid on the
mixer [17]

Answer:

The adjusting entry on 31st July will be;

Salaries Expense (Dr.) $480

Salaries Payable  (Cr.) $480

Explanation:

Molly Mocha hires one student who works for 5 days and is paid on Monday. The student who has started working on 28th July Monday then he has worked till 1st August Friday. The adjusting entry need to be made on Thursday 31st July. The student is paid $120 per day so for 4 days of working it will be $120 * 4 days till 31st July. Since Molly Mocha pays salaries on following Monday it should record salaries expense as debit and salaries payable as credit in its accounts.

6 0
3 years ago
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