Answers
Answer:
The correct answer is: The expected rate of return for the stock would be around 7%.
Explanation:
The Beta coefficient is a numeral measure that portraits the volatility of a stock compared to the overall market performance. If a stock's beta is closed to the numerical value one (1) it implies it is highly correlated to the price movement of the overall market.
In that case, if a stock's beta is 0.8 it implies it follows the market price movements. If the stock expected rate return is 12% but the market return turns out to be 5% points below expectations, it means the stock's return would end up being around 7%.
Final answer:
The rate of return on the stock would decrease proportionally to its beta value in response to the market return being lower than expected. Given the stock's beta of 0.8 and the market return falling 5 percentage points below expectations, the new estimated rate of return on the stock would be 8%.
Explanation:
The rate of return on a stock can be affected by changes in market conditions. If the market return this year is lower than expected, this could affect the return on the particular stock in question, which has a beta of 0.8. The beta value of a stock measures its sensitivity to market movements, with a value less than 1 indicating that the stock is less volatile than the market. Given the expected return of 12%, a market return 5 percentage points below expectations implies that the new expected return on the stock would decrease proportionally to its beta. This can be calculated as 12% - (0.8 * 5%) = 12% - 4% = 8%. Therefore, if the market return is 5 percentage points below expectations, your best guess for the rate of return on the stock would be 8%.
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Related Questions
Terrence needs to deliver negative feedback to an employee, Chad, using his company's appraisal software. Before delivering the feedback, he should first Multiple Choice meet with Chad in person and establish goals for improvement. discuss Chad's poor performance with other managers in the company. send a company-wide email reiterating key performance objectives. rank the performance of each employee on a scale of one to ten. privately warn Chad's coworkers that they may face increased scrutiny due to Chad's ongoing poor performance.
On December 31, 2021, Larry's Used Cars had balances in Accounts Receivable and Allowance for Uncollectible Accounts of $70,000 and $1,250, respectively. During 2022, Larry's wrote off $2,675 in accounts receivable and determined that there should be an allowance for uncollectible accounts of $5,650 at December 31, 2022. Bad debt expense for 2022 would be:
he following information relates to Jay Co.'s accounts receivable for 2004: Accounts receivable, 1/1/04 $650,000 Credit sales for 2004 2,700,000 Sales returns for 2004 75,000 Accounts written off during 2004 40,000 Collections from customers during 2004 2,150,000 Estimated future sales returns at 12/31/04 50,000 Estimated uncollectible accounts at 12/31/04 110,000 What amount should Jay report for accounts receivable, before allowances for sales returns and uncollectible accounts, on December 31, 2004?
Preparing a Sales Budget Patrick Inc. sells industrial solvents in 5-gallon drums. Patrick expects the following units to be sold in the first three months of the coming year: January 41,000 February 38,000 March 50,000 The average price for a drum is $35. Required: Prepare a sales budget for the first 3 months of the coming year, showing units and sales revenue by month and in total for the quarter. Do not include a multiplication symbol as part of your answer. Patrick Inc. Sales Budget For the Coming Quarter January February March 1st Quarter Total Units Price $ $ $ $ Sales $ $ $ $
Standard hours (SH) allowed per unit 3
Actual production in units 20,000
Actual variable overhead costs $220,500
Actual direct labor hours 61,200
Required:
1. Calculate the standard direct labor hours for actual production.
2. Calculate the applied variable overhead. $
3. Calculate the total variable overhead variance. Enter amounts as positive numbers and select Favorable or Unfavorable.
Answers
Answer:
1. 60,000 hours
2. $210,000
3. $10,500 Unfavorable
Explanation:
1. Standard Hours = 3 per unit
Actual production units = 20,000
Standard Hours for actual production = Standard Hours × Actual production units
= 3 × 20,000
= 60,000 hours
2. Applied variable overhead = Standard hours × Standard Rate per hour
= 60,000 × $3.50
= $210,000
3. Total Variable overhead variance = Applied variable overhead - Actual variable overhead overhead
= $210,000 - $220,500
= $10,500 Unfavorable
Answers
Answer:
Revenue= $503,538.46
Explanation:
Giving the following information:
In 2019, X Company's profit function was 0.31R - $89,000, where R is revenue. In 2020, the relationship between revenue and variable costs will not change, but fixed costs will increase by $16,020.
Tax rate= 35%
Desired profit= 33,200
X= 0.31R - (89,000+16,020)= 0.31R - 105,020
We need to incorporate the effect of the tax rate:
X= [(0.31R - 105,020)*(1-t)]
33,200= [(0.31*R) - 105,020]*(1-0.35)
33,200/0.65= 0.31R - 105,020
51,076.92 + 105,020= 0.31R
503,538.46= R
O it is difficult to determine the relevant industry and geographic market.
O it is an expensive and time-consuming standard.
O each action of a firm must be analyzed separately and within a particular context.
Answers
Answer:
The problem faced while using the judgement by the market structure criteria is that it is difficult for determining the geographic market and the relevant industry.
Explanation:
Market structures criteria are the kind or type of goods and services being traded, the size as well as the numbers of the consumers and the producers in the market and the degree to which the information could flow freely.
So, the problem which can be faced while using the judgement by the market structure criteria is that it is difficult for determining the geographic market and the relevant industry.
Answers
Answer:
9.92%
Explanation:
First, find the Annual Percentage Rate (APR).
You can do this with a financial calculator using the following inputs;
PV = -24500
N = 60
PMT = 514.55
then CPT I/Y = 0.792% (this is a monthly rate)
APR = 0.792% *12 = 9.5%
Next, convert APR to EAR;
EAR =
whereby m= number of compounding periods per year ;12 in this case.
EAR =
= 1.0992476 - 1
=0.0992476 or 9.92%
Therefore, the effective rate on this loan is 9.92%
Answers
Answer:
Company's contribution margin ratio is 70.59%
Final answer:
The contribution margin ratio for Sweet Treats is calculated by subtracting the variable cost per cone from the selling price per cone to get the contribution margin per cone. This is then divided by the selling price per cone to get the Contribution Margin Ratio, which is 70.59%.
Explanation:
To calculate the contribution margin ratio for Sweet Treats, we first need to determine the contribution margin per cone. This is done by subtracting the variable cost per cone ($1.25) from the selling price per cone ($4.25), which gives us a contribution margin of $3.00 per cone.
Then, the Contribution Margin Ratio is calculated by dividing the contribution margin per unit by the selling price per unit. In our case, the selling price per cone is $4.25 and our contribution margin per cone is $3.00. Therefore:
Contribution Margin Ratio = ($3.00/$4.25)×100% = 70.59%.
So, for Sweet Treats, the contribution margin ratio is 70.59%. This means that for each cone sold, 70.59% of the sales price is contributed to covering fixed costs after variable costs have been paid. Once the fixed costs are covered, the remaining amount goes into profit.
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Answers
Answer:
$35,200
Explanation:
Given that
Invested amount = $320,000
Rate of interest = 11%
So by considering the above information, the amount of annual scholarship that can be given from this investment is
= Invested amount × Rate of interest
= $110,000 × 11%
= $35,200
By multiplying the invested amount with the rate of interest we can find out the annual scholarship amount