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murzikaleks [220]
2 years ago
6

According to the bond-yield-plus-risk-premium approach, a firm's cost of retained earnings, r s , can be estimated by adding a r

isk premium of 3 to 5 percentage points to its _____.
Business
1 answer:
Masja [62]2 years ago
7 0

The approach suggest that a firm's cost of retained earnings can be estimated by adding a risk premium of 3% to 5% points to the before-tax interest rate on the firm's own long-term debt.

The bond-yield-plus-risk-premium approach does assumes that cost of equity is closely related to the firm's cost of debt.

  • The premium approach does help to determine the value of an assetof a company's such as its traded equity.

However, the approach suggest that a firm's cost of retained earnings can be estimated by adding a risk premium of 3% to 5% points to the before-tax interest rate on the firm's own long-term debt.

Read more about the premium approach:

<em>brainly.com/question/20354983</em>

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Soundgarden Company sold 200 color laser copiers on July 10, 2020, for $4,000 apiece, together with a 1-year warranty. Maintenan
e-lub [12.9K]

Answer:

Explanation:

The journal entries are shown below:

1. Cash A/c Dr $800,000        ($4,000 ×  200 color laser copiers)

          To Sales revenue A/c $800,000        

(Being the sale of the copies are recorded)

2. Warranty expense A/c Dr $17,000

             To Inventory A/c $17,000

(Being the warranty expense is recorded)

3.  Warranty expense A/c Dr  $49,000    (200 × $330 - $17,000)

             To Warranty liability A/c $49,000

(Being the accrual warranty is recorded)

3 0
4 years ago
Burt's Bees buys raw materials in order to reprocess them into its finished earth-friendly products such as perfumes, lip balms,
Viefleur [7K]

The type of organizational market that best describes Burt's Bees is a manufacturer.

<h3>Who is a manufacturer?</h3>

It should be noted that a manufacturer is also known as a producer. This is an individual who produces goods to be used by consumers.

In this case, the type of organizational market best describes Burt's Bees is a manufacturer.

Learn more about market on:

brainly.com/question/25754149

#SPJ1

5 0
2 years ago
Stocks offer an expected rate of return of 10% with a standard deviation of 20% and gold offers an expected return of 5% with a
liq [111]

Answer:

Yes

Explanation:

It is possible for an investor to be attracted to holding gold as a part of his portfolio despite that it appears stocks dominate gold.

An investor may elect to hold gold if there is a low correlation between stocks and gold. However, if the correlation between gold and stocks is high, gold will not be attractive and no investor will hold god.

Therefore, an investor will hold gold when there is a low correlation between stocks and gold.

8 0
3 years ago
What are the four conditions of monopolistic competition?
professor190 [17]

1) Many firms

2) Few artificial barriers to entry

3) Slight control over price

4)Differentiated products

5 0
3 years ago
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