A manager believes his firm will earn a 14 percent return next year. His firm has a beta of 1.2, the expected return on the market is 11 percent, and the risk-free rate is 5 percent. Compute the return the firm should earn given its level of risk. (Round your answer to 2 decimal places.)

Answers

Answer 1

Answer:

r = 0.122 or 12.2%

Explanation:

Using the CAPM, we can calculate the required/expected rate of return on a stock. This is the minimum return required by the investors to invest in a stock based on its systematic risk, the market's risk premium and the risk free rate.  

The formula for required rate of return under CAPM is,

r = rRF + Beta * (rM - rRF)

Where,

rRF is the risk free rate rM is the market return

r = 0.05  +  1.2 * (0.11 - 0.05)

r = 0.122 or 12.2%


Related Questions

If a central bank uses the tools of monetary policy to reduce the demand for goods and services, the likely result is inflation and unemployment in the short run.
a higher, higher
b. lower, higher
c. lower, lower
d. higher, lower​

Answers

Answer:

b. lower, higher

Explanation:

When the demand of the goods and services is decreased so the central bank required to extract the excess money supply. This results in rise in the aggregate demand and high prices.

Now for reducing the money supply, the central bank used the contractionary monetary policy due to which the rate of interest would more. If there is more interest rate so there would be less investment and more saving that lesser the level of consumption.

So, it would reduce the excess money, if it is decreased so the demand would also decline due to which the price also fall this results in lesser inflation. As if there is a decline in the aggregate demand, so many factories would decreased their supply even some shut down because of the high unemployment

hence, the correct option is b.

The planning/control cycle has two planning steps. They are Select one: a. (1) make the plan, then (2) carry out the plan. b. (1) research planning, then (2) look for ways to cut costs. c. (1) make the plan, then (2) set it aside for a period of time. d. (1) research planning, then (2) receive feedback. e. (1) review previous plans, then (2) evaluate plans.

Answers

Answer:

a. (1) make the plan, then (2) carry out the plan.

Explanation:

The cycle of the planning/ control comprises of following steps

1. Make the plan

2. After that carry out the plan

3. Now the control is there by comparing

4. And finally, the control could be taken by taking corrective actions

According to the given situation,  the correct option is a

And, the rest of the options are wrong

What is one good way to find out how well prospects will do a job?

Answers

Answer:

do an interview

Explanation:

.........

Prospects fit your target market, have the means to buy your product or services, and are authorized to make buying decisions.

Assuming a current ratio of 1.0 and an acid-test ratio of 0.75, how will the purchase of inventory with cash affect each ratio?
a. Increase the current ratio and increase the acid-test ratio.
b. No change to the current ratio and decrease the acid-test ratio.
c. Decrease the current ratio and decrease the acid-test ratio.
d. Increase the current ratio and decrease the acid-test ratio.

Answers

If a company has  current ratio of 1.0 and an acid-test ratio of 0.75, the purchase of inventory with cash affect each ratio by: b. No change to the current ratio and decrease the acid-test ratio.

What is current ratio and acid-test ratio?

Current ratio is caluculated as current assets /current liabilities while acid-test ratio is calculated as current assets-inventories/current liabilities.

Both current ratio and acid- quick ratio are important for a business as they help to determine the ability of a company  to pay  their short-term liabilities.

Inconlusion the current ratio should remian unchange while the acid-test ratio should be reduce.

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Answer:

B

Explanation:

The purchase of inventory with cash will impact each ratio differently if a corporation has a current ratio of 1 and an acid-test ratio of 0.75.

What are the predictions for the Economy if Trump wins the presidential election?

Answers

Explanation:

65 per cent of investors think that his re-election would be the best outcome for financial markets.

“Usually when a president wins re-election, it means the economy is going pretty strong, so stocks tend to do well. The flip side is that new leadership in Washington can bring with it potential change that could rock the boat and hold stocks back.”

Suppose you sell nine September 2023 palladium futures contracts on this day, at the last price of the day which is $1690 per ounce. Each contract is for 100 ounces. What will your cumulative mark to market be if palladium prices are $1770 per ounce at expiration

Answers

Answer:

the cumulative mark to market is -$72,000

Explanation:

The computation of the cumulative mark to market is shown below:

Mark to market is

= (selling price - ending price) × ounces per contract × number of contracts

= ($1,690 per ounces - $1,770 per ounces) × 100 punces × 9

= -$72,000

hence, the cumulative mark to market is -$72,000

We simply applied the above formula so that the correct value could come

And, the same is to be considered

Explain the distinction between current and long-term assets pertaining to IBM computers and the investments in equity securities.

Answers

Answer: Current assets generate revenues instantly while long term assets builds over time

Explanation:

Current assets could be defined as those assets that are expected to generate cash within a short time. They are used to fund the daily or routine operations of the business, examples are cash, inventory, marketable securities, etc

Long term assets are assets that provide economic benefit to the organization for a long period of time, they are not expected to generate revenue instantly like the current assests, they might begin generating revenue after a year or two, examples are plants, equipments, trademark.

In comparison to IBM computers and their investment in equity, it's discovered that some of their investment are over time while some generate income for them immediately

Marigold Company identifies three activities in its manufacturing process: machine setups, machining, and inspections. Estimated annual overhead cost for each activity is $157,500, $404,800, and $93,600, respectively. The cost driver for each activity and the estimated annual usage are number of setups 2,100, machine hours 25,300, and number of inspections 1,800.

Required:
Compute the overhead rate for each activity.

Answers

Answer and Explanation:

The computation of the overhead rate for each type of activity is as follows:

Overhead rate is

= Activity activity ÷ Level of activity driver

For machine setup, the Overhead rate is

= $157,500 ÷ 2,100 setup

= $75 per set-up

For machining, the overhead rate is

= $404,800 ÷ 25,300

= $16 per machine hour

For inspection, the overhead rate is

= $93,600 ÷ 1,800

= $52 per inspection

On October 1, 2020, Waterway Inc. assigns $1,900,000 of its accounts receivable to Ottawa National Bank as collateral for a $1,114,000 note. The bank assesses a finance charge of 2% of the receivables assigned and interest on the note of 6%. Prepare the October 1 journal entries for both Waterway and Ottawa

Answers

Answer:

Journal Entries

Waterway Inc.

October 1

Dr. Cash                       $1,076,000

Dr. Interest Expense   $38,000

Cr. Note payable         $1,114,000

Ottawa National Bank

October 1

Dr. Note Receivable   $1,114,000                    

Cr. Interest revenue   $38,000

Cr. Cash                      $1,076,000

Explanation:

Interest = $1,900,000 x 2% = $38,000

At the time of assigning the account receivable the finance charges is applicable the interest on the loan note will be recorded when it accrues. Interest expense as finance charges will be added to calculate the Note payable value for Waterway Inc. and Note receivable value for Ottawa National Bank.

Can someone explain marginal revenue, marginal cost, and profit for each quantity level to me? I don't understand anything... And then how to make a data table for it?

20 pts and brainliest if it makes sense

Answers

Meanings:
Marginal Revenue:
The revenue gained by producing one additional unit of a good or service.
Marginal Cost:
Marginal cost of production includes all of the cost that vary with that level of production.

I Hope this helps!! :)

Felicia is looking for a new job in the insurance industry. She used to work for the controller of a retail company. What items should she add to her resume to explain her work for the controller? Select the 2 that apply.

Answers

Answer: preparing financial statements

& prepare papers for external auditor

Explanation:

Since Felicia worked for a retail company, there are definitely two things she would have being doing for the retail company that would be similar in the rod she wants to apply for at the insurance industry, they are;

-preparing financial statements;

-prepare papers for external auditor

these are a roles she would have definitely played at one point or the other for the retail store and are vital when working for the insurance industry

Problem found with in the agriculture sectors and the solution

Answers

Answer:

There are many problems in agriculture sector some of them are as follows:

Explanation:

1: Not gaining appropriate output after harvesting .

2: Lack of influence .

3: Limitations of new technologies .

As there are problems there are also definitely it's solutions .Some of them are as follows:

1: Providinng loan for farmers in low interest.

2: influencing farmers for agriculture .

3: Providing them new technologies in low cost .

Travis Brown deposited $17,500 into Browning Bank, which pays 4% compounded quarterly. Calculate how much Travis will have in his account at the end of seven years. (Round your answer to the nearest cent.)

Answers

Answer:

Travis will have $23,122.59 in his account at the end of seven years

Explanation:

Future value is the compounded value calculated using a specific time and specific rate too.

To calculate the balance after seven years use the following formula

Future value = Present value x ( 1 + periodic interest rate )^numbers of periods

Where

Future value = Balance after 7 years = ?

Periodic interest rate = 4% x 3/12 = 1%

Numbers of periods = 7 years x 12/3 = 28 periods

Placing values in the formula

Balance after 7 years = $17,500 x ( 1 + 1% )^28

Balance after 7 years = $23,122.59

A company borrowed $15,000 by signing a 120-day promissory note at 10%. The total interest due on the maturity date is: (Use 360 days a year.)

Answers

Answer: $500

Explanation:

Interest for the period = Amount borrowed * Interest rate * 120/360 days

= 15,000 * 10% * 120/360

= $500

Renata works at a retail store in the mall. She has recently been promoted and is now in charge of opening and closing the​ store, which involves handling money. After counting the money from the register at the end of the​ day, she comes up with an extra​ $25 that somehow​ wasn't accounted for. Since the money​ isn't officially​ recorded, she wonders whether it would be okay to take the money or whether she should put the money in the bank and explain the situation to her boss in the morning. She decides that she deserves the extra money for her hard work and pockets the​ $25. Which of the following describes​ Renata's actions?
A.
Conflict of interest
B.
Ethical lapse
C.
​Whistle-blowing
D.
Identity theft
E.
Ethical dilemma

Answers

The answer is A! Hope this helped

Suppose the economy is initially in long-run equilibrium and producing at the full employment level of output. Then, a giant storm temporarily shuts down all shipping routes in the Atlantic Ocean. In the short run, the_______ will shift ______ .

a. SRAS curve
b. right SRAS curve
c. left LRAS curve
d. right LRAS curve
e. left AD curve

Answers

Answer: SRAS curve; Left

Explanation:

In the short run, the Short Run Aggregate Supply Curve will shift to the left to show that supply has now reduced as all the shipping routes have been shut down on account of the storm and nothing can cross.

This will change the price of goods and services in the economy as things will become more expensive due to the short term scarcity caused by the shipping halt.

The role of the 12 Federal Reserve banks is to:

A. establish new Federal Reserve districts.
B. appoint the Federal Reserve Board of Governors.
C. set monetary policy for the United States
D. enforce federal rules on member banks.

Answers

Answer: D - Enforce federal rules on member banks

Explanation:

Just took the test

The role of the 12 Federal Reserve is to enforce federal rules on member banks. hence, Option D is correct.

What do you know about Federal Reserve?

The United States of America's central banking system is called the Federal Reserve System.

The creation of Federal Reserve Act on December 23, 1913, it was established in response to the need for centralized power in the monetary system to prevent financial crises following a string of financial panics.

hence,  The role of the 12 Federal Reserve is to enforce federal rules on member banks. Option D is correct.

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Disagreement about an employee’s performance as perceived by different sources is ____________ a problem.

Answers

Answer:

AY YO

Explanation:

ima start selling many things on ebay,so I'm setting up a PayPal account, what's the df between these 2 tho? which one should I choose? ​

Answers

I think the business account lets you have multiple users and also let’s you manage money for a business while personal is just for you and your own finances. In your case I would make it a business account.

How much would a homeowner receive with actualâ cash-value coverage and replacement cost coverage for aâ three-year old sofa destroyed by aâ fire? The sofa would cost $1,200 to replaceâ today, whereas it cost $942 three yearsâ ago, and it has an estimated life of six years.
With actualâ cash-value coverage, the amount the owner would receive for the sofa would be ?

Answers

Answer:

$729

Explanation:

We can calculate the actual cost value by first multiplying the purchase value by the depreciation rate and after that deducting that amount from the replacement cost.

DATA

Replacement value = $1,200

Purchase value = $942

Depreciation rate  = 3 years/6 years = 0.5

Solution

Acutal cost value = Replacement value - ( Purchase value x Depreciation rate)

Acutal cost value = $1200 - ($942 x 0.5)

Acutal cost value = $729

While Sally is still a minor, she wrecks the car she purchased from Bally. Can she still disaffirm the contract? Must she return Bally to?

Answers

Answer:

If Sally is still a minor, she can disaffirm the contract and return the car to Bally. Contracts involving minors are not legally binding unless the minor reaffirms them once he/she is an adult or a parent also signs the contract.

In this case, Sally's contract is voidable by her and if she chooses to, she is able to void it. What happens after she returns the car depends on the state. Some state laws force Bally to return the money even if the car is wrecked. Other states have laws that require minors to return goods in good shape, and in this case, would allow Bally to deduct any repair expenses from the money he needs to return to Sally.

The ending Retained Earnings balance of Lambert Inc. increased by $1.8 million from the beginning of the year. The company's net income earned during the year is $5.4 million. What is the amount of dividends Lambert Inc. declared and paid?

Answers

Answer:

$4.4 million

Explanation:

The ending retained earnings of Lambert incorporation increases by $1.8 million

The net income earned during the year is $5.4 million

Therefore the amount of dividend declared and paid by Lambert incorporation can be calculated as follows

= $5.4 million - $1.8 million

= $4.4 million

Discuss the need for change for the company in the scenario using either the systems contingency model or the organizational life cycle model

Answers

Answer: This various phases helps the growth of organizations at some point or the other

Explanation:

The need for a change in the company scenario in her contingency plan looks at how the company can improve in the ways they've been carrying out her activities compared to before. Here are the following stages to this model;

1)Growth through being creative; this is the initial phase of the organization with an informal and young structure.

2) Growth through leadership; this phase has to deal with the structure of the organization and how various department and professionals function

3 Growth by delegation; This phase looks at responsibility on sectional heads of the organization performing to accomplish goals.

4)Growth through coordination- This phase involves making use of inventory tracking systems

5) Growth through collaboration- this phase looks at an organization to being flexible in relation to the previous phase.

An automobile insurance policy typically includes: a. collision, comprehensive, liability, and personal injury protection b. collision, high-risk pools, indemnity, and personal injury protection c. collision, comprehensive, indemnity, and personal injury protection d. collision, high-risk pools, liability, and personal injury protection

Answers

Answer:

b. collision, comprehensive, liability, personal injury protection

Explanation:

automobile insurance policy can be regarded as a contact that exist between someone and the insurance company, which provide protection from financial loss Incas there is arises of theft, accident on ones car. It should be noted that An automobile insurance policy typically includes collision, comprehensive, liability, personal injury protection

Durango Water Works has an outstanding issue of preferred stock that has a par (maturity value) of $75.00. The stock, which pays a quarterly dividend of $1.10, will be retired by the firm in 20 years. If the preferred stock is currently selling for $68.00, what is the preferred stock’s yield-to-maturity? (Round off to the nearest 0.01%) 5.64% 7.73% 6.72% 4.28%

Answers

Answer:

6.64%

Explanation:

yield to maturity (YTM) = {preferred dividend + [(faced value - market value)/n]} / [(face value + market value)/2]

preferred dividend = $1.10n = 20 x 4 = 80 quartersface value = $75market value = $68

yield to maturity (YTM) = {$1.10 + [($75 - $68)/80]} / [($75 + $68)/2]

yield to maturity (YTM) = $1.1875 / $71.50 = 0.0166 quarterly yield x 4 = 0.0664 = 6.64% annual yield

Blossom provides environmentally friendly lawn services for homeowners. Its operating costs are as follows.

Depreciation $1,400 per month
Advertising $200 per month
Insurance $3,680 per month
Weed and feed materials $13 per lawn
Direct labor $16 per lawn
Fuel $3 per lawn

Blossom charges $80 per treatment for the average single-family lawn.

Required:
Determine the company.

Answers

Answer:

Break-even point = 110 lawns & Break-even sales point = $8,800

Explanation:

Total fixed costs = Depreciation + Advertising + Insurance

Total fixed costs = 1,400 + 200 + 3,680

Total fixed costs = $5280/month

Total variable cost per unit = Weed + Direct labor + Fuel

Total variable cost per unit = 13 + 16 + 3

Total variable cost per unit = $32/lawn

Contribution margin ratio = (Sales per unit - variable cost per unit) / sales per unit

Contribution margin ratio = (80 - 32) / 80

Contribution margin ratio = 0.6

Contribution margin ratio = 60%

Break-even sales = Fixed costs / contribution margin ratio

Break-even sales = $5280 / 60%

Break-even sales = $8800

Break-even sales units = Break-even sales / sales per unit

Break-even sales units = 8800 / 80

Break-even sales units = 110 lawns

Break-even point = 110 lawns & Break-even sales point = $8,800

A positive oil shock: Suppose scientists discover a new way to extract oil from deposits that were previously thought to be unrecoverable. The extra supply of oil leads oil prices to decline. Explain the effect on wages, the employment-population ratio, and unemployment– all for the overall economy.

Answers

Answer:

The impact of decline in oil prices to the overall economy with regard to wages, employment and unemployment is given below.

Explanation:

Oil is used by many firms, some of which use it for production in which case the oil is an input in their related costs while others use it indirectly such as in running of transportation.

When the oil prices decreases it will result in rise in demand for oil by these firms, as they can utilise oil for further production (for direct use) or purchasing & running transportation to be use in their business. This will result in more work and the demand for labour will increase which will cause the wage rate to increase, employment-population ratio to increase and the unemployment to decrease.

The wages would rise, employment ratio would rise and the unemployment in the economy would fall.

A positive supply shock would cause the prices of the oil to decline. This fall in prices is an indirect effect of this discovery. A more direct effect would be a fall that would occur in the cost of production.

Then the fall in oil prices would lead to a rise in the real income of the economy. Also causing a rise in aggregate demand.

This would then lead to a rightward shift of the demand curve. Therefore the wages would rise, employment ratio would rise and the unemployment in the economy would fall.

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Brownie Bakery eaned net sales revenue of $68,000,000 in 2018. Cost of goods sold was $42,840,000, and net income reached $10,000,000, the company's highest ever. Compute the company's gross profit percentage for 2018.

Answers

Answer:

37%

Explanation:

We would calculate the gross profit for the above company as;

Gross profit = Revenue - Cost of goods sold

Given that;

Revenue = $68,000,000

Cost of goods sold = 42,840,000

Gross profit?

Therefore,

Gross profit = $68,000,000 - $42,840,000 = $25,160,000

Gross profit percentage will now be computed as;

Gross profit percentage = Gross profit ÷ Revenue

= $25,160,000 ÷ $68,000,000

= 37%

The company's gross profit percentage for 2018 is 37%.

________ relates to the distribution of resources across society.

a. Efficiency
b. Social surplus
c. Utility
d. Equity

Answers

Answer:

d. Equity

Explanation:

Equity involves the implementation of the appropriate act to achieve fairness. This makes it possible to ensue that the right of an individual is not jeopardized. Thus, equity treat everyone with all fairness and ensure compensation where necessary.

Since the resources are distributed across the society, then this relates to equity. Equity means equality.

In what ways do different ideologies and political systems influence the environment in which MNCs operate?

Answers

Answer:

meant to cover all aspects of the society organized as a political ent called the state ... the influence the ideological "infrastructure" exerts on the latters' institu- tions and ... both of them make use, to a large extent, of identical political institutions ... reveal the different approaches and modes of thinking of various periods.

Explanation:

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