Answer: The manager should include 7 independent variables in her multiple regression analysis .
Explanation:
Given : The manager wants to forecast annual sales revenues of snekers of different categories.
The given categories are :-
Sports , color , gender.
Also when we have a categorical variable that assumes n different divisions then the number of dummy explanatory variable for multiple regression will be n-1.
Number of types of sports = 3
⇒ Number of dummy variables for types of sports = 3-1 =2
Number of types of color = 5
⇒ Number of dummy variables for types of color = 5-1 =4
Number of types of gender = 2
⇒ Number of dummy variables for gender = 2-1 =1
Now, the total number of independent variables =
Hence, the manager should include 7 independent variables in her multiple regression analysis .
Answer:
Investment in stock X is worth $21,387.60
Explanation:
Expected Return of the protfolio is calculated:
Where:
- Stock X return = 9.7%
- Stock Y Return = 17.7%
- Risk free = 3.8% (investment in Risk free = 18,000/78,000 = 23.08%)
- Investment in X+Y = 1 - Invetment in RF = 1 - 0.2308 = 0.7692
So, replacing the numbers
Where X+Y = 0.7692, so X = 0.7692-Y
Then
So Y = 0.0396/0.08 = 0.495 = 49.5%
X = 0.7692 - 0.495 = 0.2742 = 27.42%
27.42% * 78000 =
Answer:
(a) 14%
(b) 15%
(c) 15.48%
Explanation:
cost of retained earnings:
= ($3.03 ÷ $34) + 0.05
= 0.09 + 0.05
= 14%
Therefore, the Evanec's cost of retained earnings is 14%
Flotation cost percentage:
= [($34 - $28.90) ÷ $34] × 100
= 0.15 × 100
= 15%
Therefore, the Evanec's percentage flotation cost is 15%.
Cost of new common stock:
= ($3.03 ÷ $28.90) + 0.05
= 0.1048 + 0.05
= 15.48%
Therefore, the Evanec's cost of new common stock is 15.48%.
Answer:
The correct statement related to the pro forma statements is:
The addition to retained earnings is equal to net income less cash dividends.
Explanation:
When the beginning retained earnings are increased by the addition to retained earnings, it means that the cash dividends have been subtracted from the net income. This addition is the leftover net income after offsetting the dividends. It increases the retained earnings by the end of the financial period.