Answer:
B; it offers an expected excess return of 1.8%
Explanation:
Here are the options :
A; it offers an expected excess return of .2%A; it offers an expected excess return of 2.2%B; it offers an expected excess return of 1.8%B; it offers an expected return of 2.4%
to determine which stock is the better buy, we have to calculate the expected return of the stocks using CAPM
According to the capital asset price model: Expected rate of return = risk free + beta x (market rate of return - risk free rate of return)
Stock A = 5% + 1.2(9% - 5%) = 9.8%
Stock B = 5% + 1.8(9% - 5%) = 12.20%
The next step is to determine the excess return
stated expected return - calculated expected return = excess return
Stock A's excess return = 10% - 9.8% - 0.2%
Stock B's excess return = 14 - 12.20 = 1.8%
Security B would be considered because it has a higher excess return
Answer:
$26,000 adverse variance
Explanation:
Fixed Overheads Volume Variance = Budgeted Overheads at Actual Output - Budgeted Fixed Overheads
= $1.30 x 60,000 hours - $1.30 x 80,000
= $78,000 - $104,000
= $26,000 adverse variance
The fixed factory overhead volume variance is $26,000 adverse variance
Answer:
Academic achievements. ...
Relevant coursework. ...
Clubs. ...
Sports and musical instruments. ...
Volunteer work. ...
Languages. ...
Computer skills. ...
Any kind of employment at all.
Explanation:
This is true, it is a misunderstandment
The expected return on the common stock should decrease.
To calculate the new expected return on the common stock, we need to calculate the new value of the common stock and debt. The new value of the common stock is $64 million + $16 million = $80 million. The value of the debt is reduced by $16 million to $20 million.
The new expected return on the common stock is 16.6% * ($80 million/$96 million) = 15.63%.
Therefore, the expected return on the common stock should decrease from 16.6% to 15.63%.
A security that symbolises ownership in a firm is called common stock. Common stock owners choose the board of directors and cast ballots for corporate rules. Long-term rates of return are often higher with this type of stock ownership.
To know more about stock here
brainly.com/question/14040903
#SPJ4
