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ivanzaharov [21]
2 years ago
12

g which is debt-free and finances only with equity from retained earnings. You were given the following information: rRF = 3.50%

; RPM = 4.50%; and b = 0.88. What is the firm's cost of equity from retained earnings based on the CAPM?
Business
1 answer:
Pachacha [2.7K]2 years ago
3 0

Answer: 7.46%

Explanation:

The CAPITAL ASSET PRICING MODEL is a very useful tool for calculating a firm's Cost of Equity.

The Formula is,

Rc = Rrf + b(Rpm)

Where,

Rc is the Cost of Equity

Rpf is the Risk risk free rate

b is beta

Rpm is the risk premium

Plugging in the digits we have,

Rc = 0.0350 + 0.88(0.045)

= 0.0746

The firm's cost of equity from retained earnings based on the CAPM is therefore 7.46%

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The capital and financial account is the record of​ _____ minus us investment abroad.
Charra [1.4K]

Answer: The capital and financial account is the record of​ the United States minus us investment abroad.

Explanation: This account will record the balance of all payments for a country's international transactions with the rest of the world. The transactions are recorded in two different accounts, the current account and the capital and financial account.

5 0
3 years ago
where q is the quantity of bicycles produced. When calculating the marginal revenue and marginal profit in this problem, use the
olya-2409 [2.1K]

Question Completion

A manufacturer of mountain bikes has the following marginal cost function:

C(q)=600/(0.7q+5)

Answer:

a. The total cost = $3,492.40

b. The profit on the first 30 bikes is:

= $2,507.60

Explanation:

a) Data and Calculations:

Fixed cost for producing the bicycles = $2,800

Number of bicycles produced = 30

Selling price per bike = $200

Marginal cost (C(q)) =600/(0.7q+5)

= 600/ (0.7*30 + 5)

= 600/ (21 + 5)

= 600/26

= $23.08

Total cost = Fixed cost + (C(q))

= $2,800 + $23.08 * 30

= $2,800 + $692.40

= $3,492.40

Profit:

Sales revenue $6,000 ($200 * 30)

Less Total cost  3,492.40

Profit =             $2,507.60

7 0
2 years ago
A corporation declared and issued a 20% stock dividend on October 1. The following information was available immediately prior t
sashaice [31]

Answer:

$195,200 increase

Explanation:

The computation of the amount of the contributed capital increase or decrease is shown below:

Given that

Stock Dividend = Outstanding shares × 20%

= 61,000 Shares × 20%

= 12,200 shares

Now the Value of Stock Dividend is

= Number of Shares × Market Value per share

= 12,200 Shares × $16

= $195,200

There is an increase in the contributed capital

5 0
3 years ago
A seller's broker sold a property to a buyer. Four months later, when the first rains of the season began, the buyer discovered
noname [10]

Answer:The Court considers;

1. Was the leaking roof conspicuous for anyone to see.

2. Was it inconspicuous that requires one to be informed of it's existence.

Explanation:

If (1) is the case then the buyer is responsible for the leakage for he his assumed to have noticed it but do not see it as an issue.

If (2) is the case, the broker is responsible for he his expected to have informed the buyer since the leakage is not obvious on the building

8 0
3 years ago
Flesch Corporation produces and sells two products. In the most recent month, Product C90B had sales of $36,000 and variable exp
salantis [7]

Flesch Corporation produces and sells two products, in case if there is any shift in the sales from product Y45E to C90B, then the break even will also decrease since the contribution margin for Product C90B is less than the Product Y45E.

<u>Explanation</u>:

Contribution Margin: Total Contribution ÷ Total Sales

  • Product C90B:

                  =(36000 - 10800) ÷ 36000 = 0.7

                  = 70%

remaining = 100 - 70 = 30%

  • Product Y45E:

                 = (27280 - 12276) ÷ 27280

                 = 0.55 = 55%

remaining = 100 - 55 = 45%

Since the contribution margin of Product C90B < Product Y45E, the break even will decrease.

7 0
3 years ago
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