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In February 2017 the risk-free rate was 4.97 percent, the market risk premium was 7 percent, and the beta for Twitter stock was

Gnesinka [82]

Answer:

14.77%

Explanation:

In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

= 4.97% + 1.40 × 7%

= 4.97% + 9.8%

= 14.77%

The (Market rate of return - Risk-free rate of return) is also called market risk premium and the same is shown in the answer

5 0

3 years ago

The general term for the payments for the use of resources is ______?

Zielflug [23.3K]

A. Wages is the general term for the payments for the use of resources

6 0

2 years ago

Assume that you and your best friend each have $1,000 to invest. You invest your money in a fund that pays 10% per year compound

marishachu [46]

Answer:

correct answer is c. You both have the same amount of money

Explanation:

given data

invest = $1000

pay compound interest = 10%

pay simple interest = 10%

time = 1 year

solution

we get here difference in the total amount that is your friend money - your money .................1

so difference in the total amount = invest × $(1+rate)^{time}$ - [ invest + ( invest × rate × time) ] ......................2

put here value

difference in the total amount = $1000 × $(1+0.10)^{1}$ - [$1000 + ( 1000 × 10% × 1) ]

difference in the total amount = 0

so correct answer is c. You both have the same amount of money

7 0

3 years ago

special - time order for 15,000 bird feeders at $ 3,50 per unit Bluebird currently produces and sells . This level represents 80

schepotkina [342]

Answer:

$15,000 Increase

Explanation:

Calculation to determine what the effect on net income will be :

Effect on net income = (15,000 x $3.50) – ($2.50x 15,000)

Effect on net income = $52,500-$37,500

Effect on net income = $15,000 Increase

Therefore If Bluebird accepts this additional business , the effect on net income will be :$15,000 Increase

5 0

3 years ago

Mays Corp. reported free cash flows for 2018 of $491 million and investment in operating capital of $321 million. Mays Corp. inc

Anon25 [30]

Answer: $975 million

Explanation:

Given the above details, we can solve for Earnings Before Tax and Interest with the following formula,

Operating Cash Flow = EBIT – Taxes on EBIT + Depreciation

Making EBIT the subject would turn it to be,

EBIT = Operating Cash Flow + Taxes on EBIT - Depreciation

We have all of the above except the EBIT and Operating Cash Flow.

Luckily we can solve for the Operating Cash Flow with the details given using,

Operating cash flow = Free Cash Flow + Investment in operating capital

Therefore,

= $491 million + $321 million

= $812 million

Operating cash flow is $812 million

Plugging it into the original formula we have,

EBIT = Operating Cash Flow + Taxes on EBIT - Depreciation

EBIT = $812 million + $309 million - $146 million

EBIT = $975 million

Earnings before Taxes and Interest is $975 million.

If you need any clarification do react or comment.

5 0

3 years ago