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AnnZ [28]
2 years ago
9

Smathers Corp. stock has a beta of .89. The market risk premium is 7.20 percent and the risk-free rate is 2.93 percent annually.

What is the company's cost of equity
Business
1 answer:
Natasha2012 [34]2 years ago
8 0

Answer: 9.31%

Explanation:

Given: Smathers Corp. stock has a beta of 0.89.

⇒ Beta = 0.89

Risk-free rate = 2.93 percent

Market risk premium = 7.20 percent

Formula: Cost of Equity = [ Risk free rate + (Beta) × ( Market risk premium) ]

Substitute all values, we get

Cost of Equity =  [ 2.9 + (0.89) × ( 7.20) ]%

= [2.9+6.41]%

= 9.31%

Hence, the company's cost of equity is 9.31%.

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Prepare a net worth statement for Ben Lingo based on this information: He owns a car worth $2,000, but owes $1,500 on it at the
Murljashka [212]

Answer:

Ben Lingo's Net Worth Statement:

Assets:

Cash $82

Savings $150

Car $2,000

Inventory $1,200

Total Assets = $3,432

Liabilities:

Car loan $1,500

Credit Union loan $80

Total Liabilities = $1,580

Net Worth = Total Assets - Total Liabilities

                 = $3,432 - $1,580

                 = $1,852

5 0
2 years ago
What is the maximum period of time that a personal services contract for temporary consultant services may be awarded?
Kisachek [45]

Answer: 1 year

Explanation: According to the Defence Federal Acquisition Regulation under 237.106, personal service contracts that apply to consulting or expert services will be limited to one year. However this will only apply to duties that are temporary (limited to 1 year, or 12 months), or non cumulative days (needs to be 130 days or more that are broken up within a year). During this time the officer contracting the service will enter into a contract, make an order, or exercise options for various services that do not exceed 1 year.

6 0
2 years ago
Burrito King (a new fast-food franchise opening up nationwide) has successfully automated burrito production for its drive-up fa
bezimeni [28]

Answer:

(A)0.6600 (B) 1.325 (C) 0.997 or 1 minute

Explanation:

Solution

Given that:

The constant rate = 30 seconds

The arrival rate according to Poisson distribution is = 45 seconds

Now,

(A) We solve for the average length line of cars

The formula is given below:

Lq = λ²/ 2μ ( μ -λ)

Here,

λ = this is the mean time of arrival rate

μ = This is the mean service rate

Thus we compute for the mean time arrival rate which is given below:

The mean arrival rate λ = arrival rate/ 60 seconds

= 60/45

= 1.33 customer per minute

Then we solve for the means service rate which is given below

The mean service rate μ = 60 seconds/ mean rate

= 60/30 = 2 customer per minute

We will now solve for the average line length in cars which is shown below:

Lq = λ²/ 2μ ( μ -λ)

Lq = 1.33²/2*2 (2-1.33)

Lq = 1.7689/4 (0.67)

Lq = 1.7689/2.68

Lq = 0.6600

Therefore the average length in line for cars is 0.6600 cars

(B) We solve for the average number of cars in the system

Ls =Lq + λ /μ

Ls =0.600 + 1.33/2

Ls =0.6600 + 0.665

Ls = 1.325

(C) Finally we need to find the expected average time in the system which is shown below:

Ws = Ls/λ

Ws= 1.325/1.33 = 0.997 or 1.00

The expected time average  in the system is 0.997 or 1.00 minutes.

3 0
2 years ago
Western Markets has 150,000 shares outstanding with a market price per share of $15. Each share is entitled to one right. If the
Ludmilka [50]

Answer: $8.50

Explanation:

                             Price          Outstanding     Value

Total  Shares    15      150,000.00   $2,250,000.00  

Right Price         2       150,000.00   $300,000.00  

Total  Shares and Value    300,000.00   $2,550,000.00  

Ex rights Price = $2,550,000/300,000 = $8.5  

8 0
2 years ago
The Lumbar Chair Company manufacturers a standard recliner. During February, the firm's Assembly Department started production o
Irina-Kira [14]

Answer:

115,000 chairs

Explanation:

Calculation to determine How many of the chairs that were started were also completed during February

Using this formula

Chairs started and Completed=Beginning chairs production-Ending chairs production

Let plug in the formula

Chairs started and Completed=140,000 chairs- 25,000 chairs

Chairs started and Completed= 115,000 chairs

Therefore The numbers of chairs that were started and were also completed during February will be 115,000 chairs

3 0
1 year ago
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