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rusak2 [61]
2 years ago
7

Suppose two factors are identified for the U.S. economy: the growth rate of industrial production, IP, and the inflation rate, I

R. IP is expected to be 4% and IR 6%. A stock with a beta of 1 on IP and 0.7 on IT currently is expected to provide a rate of return of 12%. If industrial production actually grows by 5%, while the inflation rate turns out to be 8%, what will be your expected rate of return on the stock, given the new information about the industrial production rate and the inflation rate
Business
1 answer:
mash [69]2 years ago
7 0

Answer:

14.4%

Explanation:

Calculation for what will be your expected rate of return on the stock.

Expected rate of return on the stock=12% + 1(5%-4%) + .7(8%-6%)

Expected rate of return on the stock=12%+1(1%)+.7(2%)

Expected rate of return on the stock=12%+1%+1.4%

Expected rate of return on the stock=14.4%

Therefore your expected rate of return on the stock is 14.4%

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If a company wanted to finance the purchase of equipment without diluting shareholders equity, which of the following operation
Jobisdone [24]

Answer:

Issuing convertible bonds

Explanation:

Convertible bonds are corporate bonds that can be exchanged for common stock in the issuing company. Companies issue convertible bonds to lower the coupon rate on debt and to delay dilution. A bond's conversion ratio determines how many shares an investor will get for it.

5 0
2 years ago
Given the following data: Average operating assets $ 504,000 Total liabilities $ 23,520 Sales $ 168,000 Contribution margin $ 85
kipiarov [429]

Answer:

9%

Explanation:

According to the given situation, the solution of return on investment is shown below:-

Return on investment = (Net operating income ÷ Average operating assets) × 100

now, we will put the values into the above formula

= ($45,360 ÷ $504,000) × 100

= 0.09 × 100

= 9%

Therefore for computing the return on investment we simply applied the above formula.

7 0
3 years ago
The basic distinction between a primary and a secondary market is a. proceeds from sales in the primary market go to the current
zavuch27 [327]

Answer:

c. Only new securities are sold in the primary market.

Explanation:

  • Primary markets is where securities are sold for the first time. Secondary market is a place (physical o virtual place) where securities are renegociated.
  • As an example, think about a company which is increasing its capitalization and wants to emit new stocks: it would do it in the primary market.
  • On the other hand, if some of the members of the company wantsto buy more stocks from that company, unless the company is emiting new stocks, he or she would have to buy the stocks in the secondary market.
3 0
3 years ago
A monopolist is a price maker because
lapo4ka [179]

Answer:

sorry just answering to get points

Explanation:

sorry just answering to get points

6 0
3 years ago
Which of the following terms is also known as the bottom line
Eddi Din [679]
<span>Which of the following terms is also known as the bottom line? Net </span>profit is known as the bottom line in many instances. Net profit is the the final sales dollars remaining after all expenses, interest, taxes, and dividends are subtracted from a company's total revenue. 
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