Explanation:
im not an expert but I think the value and how it looks
I'd say D, striking out verbally or physically.
Answer:
A) The expected return for the market is 13.5 and stock is 11.6.
B) The standard deviation of the market is 3.85 and stock is 6.22.
Explanation:
![\\B. \text{The formula for variance.}\\\sigma ^2 = Var(X) \\= \sum x^2 P(x)- \mu^2 \\Standard \ deviation, \sigma = \sqrt{\sigma ^2} \\\text{Vraince from market.} \\\sigma _m ^2 = \left [ (15)^2 (0.3) + (9)^2 (0.4) + (18)^2 (0.3) \right ] - (13.5)^2 \\= 167.1 - 182.25 \\= 14.85 \\](https://tex.z-dn.net/?f=%5C%5CB.%20%5Ctext%7BThe%20formula%20for%20variance.%7D%5C%5C%5Csigma%20%5E2%20%3D%20Var%28X%29%20%5C%5C%3D%20%5Csum%20x%5E2%20P%28x%29-%20%5Cmu%5E2%20%5C%5CStandard%20%5C%20deviation%2C%20%5Csigma%20%3D%20%5Csqrt%7B%5Csigma%20%5E2%7D%20%5C%5C%5Ctext%7BVraince%20from%20market.%7D%20%5C%5C%5Csigma%20_m%20%5E2%20%3D%20%5Cleft%20%5B%20%2815%29%5E2%20%280.3%29%20%2B%20%289%29%5E2%20%280.4%29%20%2B%20%2818%29%5E2%20%280.3%29%20%5Cright%20%5D%20-%20%2813.5%29%5E2%20%5C%5C%3D%20167.1%20-%20182.25%20%5C%5C%3D%2014.85%20%5C%5C)
![Standard \ deviation = \sqrt{14.85} \\= 3.85357 \\\text{Variance of stock J.} \\\sigma _j ^2 = \left [ (20)^2 (0.3) + (5)^2 (0.4) + (12)^2 (0.3) \right ] - (11.6)^2 \\= 173.2 - 134.56 \\= 38.64 \\Standard \ deviation \ of \ stock \ J = \sqrt{38.64} \\= 6.216108 \\= 6.22](https://tex.z-dn.net/?f=Standard%20%5C%20deviation%20%3D%20%5Csqrt%7B14.85%7D%20%5C%5C%3D%203.85357%20%5C%5C%5Ctext%7BVariance%20of%20stock%20J.%7D%20%5C%5C%5Csigma%20_j%20%5E2%20%3D%20%5Cleft%20%5B%20%2820%29%5E2%20%280.3%29%20%2B%20%285%29%5E2%20%280.4%29%20%2B%20%2812%29%5E2%20%280.3%29%20%5Cright%20%5D%20-%20%2811.6%29%5E2%20%5C%5C%3D%20173.2%20-%20134.56%20%5C%5C%3D%2038.64%20%5C%5CStandard%20%5C%20deviation%20%5C%20of%20%5C%20stock%20%5C%20J%20%3D%20%5Csqrt%7B38.64%7D%20%5C%5C%3D%206.216108%20%5C%5C%3D%206.22)
Answer:
6.57%
Explanation:
The WACC formula is really easy you just have to calculate the weights of the debt or equity whatever is given in the question and then multiply it by the percentage of borrowing given. The total borrowing in this question is 12000(4911+4305+2784).
WACC for this question will be calculated as:
=> (4911/12000)*0.04 + (4305/12000)*0.06 + (2784/12000)*0.12
=> 0.0657
=> 6.57%
Hope this helps,
Goodluck buddy
