Answer:
Stock's beta = 0.65 (Approx)
Explanation:
Given:
Correlation = 0.49
Standard deviation of stock (SDs) = 33% = 0.33
Standard deviation of market (SDm) = 25% = 0.25
Find:
Stock's beta
Computation:
Stock's beta = Correlation(SDs) / SDm
Stock's beta = 0.49 (0.33) / 0.25
Stock's beta = 0.65 (Approx)
<span>Nutrition Labeling and Education Act
This act requires nutrition labeling on food and standardizes terms such as serving size, "low fat", "light", and the such. It prevents things such as claiming "low calorie" cause the "calories per serving" is only half of the competitors, while specifying an absurdly low serving size that's also half the size the competitors use.</span>
Answer:
D. No loss recognized and a reduction in E&P of $200,000
Explanation:
Given that:
- Current and accumulated E&P : $500,000
- A distribution of land to its sole shareholder: $200,000
- E&P basis to Catamount : $250,000
From that, we can see that the current and accumulated E&P is greater than its distribution of land so no loss would be reported so there will be reduction in earning and profits of the company of $200,000.
Hope it will find you well.
Answer:
The WACC before bond issuance is 3.9% and the WACC after bond issuance is 3.71%
Explanation:
In order to calculate the WACC before bond issuance
, we would have to calculate first the cost of equity using capital asset pricing model
.
So Using CAPM we have Rf + Beta x Market risk premium
=
0.5% + 0.85 * 4%
= 3.9%
. cost of equity
Therefore WACC before bond issuance = (Cost of equity x weight of equity + cost of debt (1-tax) x weight of debt)
= 3.9%
. WACC before bond issuance will be equal to cost of equity in this case as there is no debt issue.
In order to calculate the WACC after bond issuance we make the following calculation:
WACC after bond issuance = (Cost of equity x weight of equity + cost of debt (1-tax) x weight of debt)
= (3.9% x 0.9) + (2% x 0.1)
= 3.51% + 0.2%
= 3.71%
Answer:
Yes Gordon can sue Floors n' Mores for the settlement of the contract keeping in mind that Gordon has made partial completion of the contract. Full payment would be determined based on the completion of the total work in line withe the plans submitted when the contract was signed
Explanation:
In order to understand the scenario in case if Gordon wants to sue Floors n Mores they can only be compensated for the amount of project completion in line to the expectations that matches to Floors n More.
For Example if 75% of the work is in line with the expectation of Floors N More then Gordon should be paid total amount payable multiply by 75%.
Usually in such cases if the contract is fulfilled to certain extent it is preferred to close the contract based on the %age of completion because major reconstruction, buying of fixtures and furniture was executed. Hence major risks and rewards were transferred to Floors n Mores.
