Ankar notices that one

You own a stock that has an expected return of 15.72 percent and a beta of 1.33. The U.S. Treasury bill is yielding 3.82 percent

Elza [17]

Answer:

option (b) 12.77 percent

Explanation:

Data provided in the question:

Expected return = 15.72% = 0.1572

Beta = 1.33

Risk free rate = 3.82% = 0.0382

Inflation rate = 2.95% = 0.0295

Now,

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

or

0.1572 = 0.0382 + 1.33 × ( Expected market return - 0.0382 )

or

0.119 = 1.33 × ( Expected market return - 0.0382 )

or

Expected market return - 0.0382 = 0.08947

or

Expected market return = 0.12767

or

Expected market return = 0.12767 × 100% = 12.767% ≈ 12.77%

option (b) 12.77 percent

3 0

3 years ago

What are three techniques stockholders can use to motivate managers to maximize their stock’s long-run price? Should managers fo

Romashka [77]

Answer:

Please see below.

Explanation:

a.

• Reasonable compensation package. Every stockholders would usually want a good return on their investments. One of the techniques that can be used by them is to offer good and reasonable compensation packages to the company's highly performing executives and managers. The aim is to spur them to act in the best interest of the stockholders and not themselves. This will also translate to better performance of the company.

• Firing of managers who don't perform well. If a company's stock is not performing well(does not appreciate), such would usually be tied to its board and managers. Stockholders are the owners of a company because their funds are being used to trade hence can threaten to replace or actually replace any manager who is not performing well. By so doing, the managers that are retained will be motivated to perform really well in order to retain their jobs hence translate to better company performance.

• Threat of hostile take over. Stockholders could also threaten a company's board of being taken over by a proven and well accomplished company , if their stock price does not improve overtime. When the managers or board realize that their job is being threatened, they will be motivated to act fast by ensuring that the company's stocks yield adequate return in the long run.

b.

What should be paramount to managers is how to ensure that their company's intrinsic stocks value(an estimate of the true value of a stock, that is premised on well calculated risk) are well maximized. The stockholders should also be carried along while this process is on going. By maximizing their stock's intrinsic value, such would bring about high value to the stocks, while as time goes on, the actual stock price will be much closer to the intrinsic value of the stocks.

6 0

3 years ago

Vernon Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are high-qualit

Lana71 [14]

Vernon produces and sells only 6,100 bikes each year. Due to the low volume of activity, Vernon is unable to obtain the economies of scale that larger

<h3>What is bikes?</h3>

A bicycle, also known as a pedal cycle, bike, or cycle, is a single-track, human-powered or motor-powered assisted vehicle with two wheels attached to a frame, one behind the other. A cyclist or bicyclist is someone who rides a bicycle. Bicycles were first introduced in Europe in the nineteenth century.

Infants under the age of 12 months should not be carried on a bicycle and should not sit in a rear bike seat. Infants should not be carried on a bike in backpacks or front carriers. It is not advised to leave babies in slumped positions for extended periods of time.

To know more about bikes follow the link:

brainly.com/question/18927762

#SPJ4

5 0

2 years ago

An express warranty is created when a seller: makes an affirmation of fact or promise concerning the goods that becomes part of

laiz [17]

Question:

An express warranty is created when a seller:

A) makes an affirmation of fact or promise concerning the goods that becomes part of the basis of the bargain.

B) uses descriptive terms as a part of the bargaining process, but the buyer does not take it into consideration when making the purchase.

C) sells goods meant for use for ordinary purposes.

D) avoids using a sample or model as the basis for the contract.

Answer:

The correct choice is A)

An express warranty is created in the contract when a supplier makes a promise concerning the goods that the buyer can hold on to as an incentive to purchase the product.

Explanation:

For example, if a consumer buys a Laptop online, but when it arrives the item is the wrong specifications, wrong color, or is dented or damaged in anyway, an <em>express warranty</em> might entitle the consumer to a refund or replacement.

This warranty usually is stated upfront prior to or during the execution of the sales transaction.

Cheers!

4 0

3 years ago

Multiple Versus Single Overhead Rates, Activity Drivers Deoro Company has identified the following overhead activities, costs, a

WINSTONCH [101]

Answer:

Deoro Company

1. Unit cost using direct labor hours to apply overhead:

Unit Cost

Model A $167.985

Model B $226.99

2. Unit cost using the four activity drivers:

Unit Cost

Model A $133.97

Model B $287.28

3. Activity-based costing method always produces the more accurate cost assignment.

Explanation:

a) Data and Calculations:

Activity Expected Cost Activity Driver Activity Capacity

Setting up equipment $548,080 Number of setups 680

Ordering costs 313,200 Number of orders 17,400

Machine costs 939,400 Machine hours 42,700

Receiving 343,000 Receiving hours 9,800

Total overhead costs $2,142,680

Activity Rates:

Setting up equipment $806 per setup ($548,080/680)

Ordering costs $18 per order ($313,200/17,400)

Machine costs $22 per machine hour ($939,400/42,700)

Receiving $35 per receiving hour ($343,000/9,800)

Model A Model B

Direct materials $600,000 $800,000

Direct labor $480,000 $480,000

Overhead applied $1,063,500 $1,018,200

Total costs $2,143,500 $2,298,200

Units completed 16,000 8,000

Cost per unit $133.97 $287.275

Direct labor hours 6,000 2,000

Number of setups 400 200

Number of orders 6,000 12,000

Machine hours 24,000 18,000

Receiving hours 3,000 7,000

The company's normal activity is 8,000 direct labor hours.

Assignment of overhead costs:

Model A Model B

Number of setups $322,500 (400 * $806) $161,200 (200 * $806)

Number of orders 108,000 (6,000 * $18) 216,000 (12,000 * $18)

Machine hours 528,000 (24,000 * $22) 396,000 (18,000 * $22)

Receiving hours 105,000 (3,000 * $35) 245,000 (7,000 * $35)

Total overhead applied $1,063,500 $1,018,200

Overhead based on direct labor hours:

Total overhead costs = $2,143,680

Total direct labor hours = 8,000 (6,000 + 2,000)

Overhead rate per DLH = $267.96

Allocation of overhead:

Model A Model B

Direct labor hours 6,000 2,000

Overhead (DLH) $1,607,760 ($267.96 *6,000) $535,920 ($267.96 * 2,000)

Model A Model B

Direct materials $600,000 $800,000

Direct labor $480,000 $480,000

Overhead applied $1,607,760 $535,920

Total costs $2,687,760 $1,815,920

Units completed 16,000 8,000

Cost per unit $167.985 $226.99

4 0

3 years ago