Given:
<span>General pharmacy’s stock has a beta of 1.8 and an expected return of 14%,
Sicoras corp.’s stock has a beta of 1.5 and an expected return of 16.2%.
Let Rf stand for risk free rate.
Let Rm stand for expected market return.
General Pharmacy: 14% = Rf + 1.8(Rm-Rf)
Sicoras Corp.: 16.2% = Rf + 1.5(Rm-Rf)
0.14 = Rf + 1.8Rm - 1.8Rf
0.14 = Rf - 1.8Rf + 1.8Rm
0.14 = -0.8Rf + 1.8Rm
0.14 + 0.8Rf = 1.8Rm
Rm = 0.14/1.8 + 0.8Rf/1.8
Rm = 0.078 + 0.444Rf
</span><span>0.162 = Rf + 1.5(Rm-Rf)
</span>0.162 = Rf + 1.5[(0.078+0.444Rf) - Rf]
0.162 = Rf + 0.117 + 0.666Rf - 1.5Rf
0.162 - 0.117 = Rf + 0.666Rf - 1.5Rf
0.045 = 0.166Rf
0.045/0.166 = Rf
0.271 = Rf
<span>Rm = 0.078 + 0.444Rf
</span>Rm = 0.078 + 0.444(0.271)
Rm = 0.078 + 0.120
Rm = 0.198
Rf = 27.1% ; Rm = 19.8%
The risk free rate is 27.1% and the expected market return is 19.8%.
To check, simply substitute the value of Rf and Rm in the above equation.
<u>Answer:</u>
<u>- Yes,</u>
<u>- Bilateral, Implied contract which is enforceable.</u>
<u>Explanation</u>:
Note, both parties consented to a contract even though it was an informal setting. Remember, certain gestures were used by Ed to show contract acceptance, There's also valid consideration since the value of the exchange is known; which is a candy bar for $1.
Fran thus understands that Ed will pay for the candy later since he saw the sign, this also makes it a bilateral contract (between two parties only). The contract is also enforceable since it is legal to sell candies.
Answer:
Follows are the solution to this question:
Explanation:
Some of the missing data is defined in the attached file, please find it.
Bond problem rates
Diagram values are based on the following:
Bond issuance price
Timetable for bond amortization:
please find the attachment.
Answer:
That statements is false
Explanation:
When you borrow money, interest represent the additional amount that you need to give back to the creditor. For example let's say that you borrow $1,000 with 10% interest rate per year. After one year, you need to pay back the loan with additional $100 ($1,000 x 10%) for the creditor.
This means that when the interest rate is high, it will cost you more to borrow money.
Here's the options that completes the question:
A. building a state-of-the-art facility to fully capture scale economies via an export strategy.
B. using export, licensing, or franchising strategies so as to minimize risk and capital investment.
C. locating buyer-related activities in all countries where it sells its product.
D. dispersing its activities among various countries in a manner that lowers costs or else helps achieve greater product differentiation and transferring competitively valuable competencies and capabilities from its domestic operations to its operations in foreign markets.
E. avoiding the use of strategies that entail coordinating its domestic strategic moves with its strategic moves in the various foreign markets that it enters.
Answer:
D. dispersing its activities among various countries in a manner that lowers costs or else helps achieve greater product differentiation and transferring competitively valuable competencies and capabilities from its domestic operations to its operations in foreign markets
Explanation:
A key condition that makes a firm achieve competitive advantage or a favourable business position is it's costs and product design.
If a firm can lower it's cost in a foreign market while also maintaining quality just as it is has done in it's domestic market then it stands a better chance of success.
For example, if a firm in the clothing line industry decides to expand its operations to a foreign market eg Africa.
A key factor in determining its success is its ability to lower its cost in the foreign market as compared to competitors, while also achieving the same quality standards of products.
