Compute the expected rate of return of Miss Dimaano considering her security for her work as a freelance investment banker based on the following figures: Risk free rate = 4%; Expected return of the market = 12%; Systematic risk b of the security = 1.3
Q: Paradise Company plans the following beginning and ending inventory levels (in units) for June: June…
A: The units required to be manufactured can be calculated units sold plus the change in inventory of…
Q: Oriole Company buys land for $121000 in 2021. As of 3/31/22, the land has appreciated in value to…
A: Increase in the value of land in one year is equal to: = Amount as on balance sheet date - amount as…
Q: Devern Assurance Company provides both property and automobile insurance. The projectedincome…
A: Operating income, in its most basic form, demonstrates your company's capacity to create earnings…
Q: The following Income Statement information has been obtained from the books of Unlimited Liquors…
A: Income Statement - Statement of Income includes revenue earned and expenses incurred during the…
Q: On January 1, 2021, Heaven Inc. reported the following shareholders' equity: Preference share…
A: Accumulated depreciation related to a fixed asset means the total amount of depreciation charged on…
Q: Use the following to answer questions 23 - 26 I.T Corporation was organized on January 3, firm was…
A: Retained earnings The concept of retained earnings in accounting is critical. The term refers to a…
Q: On December 1, 2000, Marimar, a lessee paid P 18.000 to XYZ Company representing the rent for 3…
A: Lease is a legal agreement by which a person gives his asset to another person for a specified…
Q: On June 1, 2018, Wildhorse Company and Sheffield Company merged to form Tamarisk Inc. A total of…
A: Earnings per share:- It is calculated company's net profit available for common shareholders by the…
Q: A boat is purchased for $51,000 and has a resale value of $42,000 after a useful life of 6 years.…
A: Calculation of depreciation under straight line method Cost - salvage value / useful life of asset…
Q: Determine the after-tax CF for Year 2 (only - not a total) if they decide to continue with manual…
A: The tax on cash outflow that employee cost would be a saving in tax and hence it would result in a…
Q: P600,000. As a result of a restructuring agreement on Januar note payable at P6,000,000 and accrued…
A: Accounting of Loan Restructuring of Loan
Q: Make a cash budget for fire ltd. for the march and april month
A: Cash budget is the budget in which it is recorded about how much cash balance company or the…
Q: Use the following to answer questions 27 – 34 Miracle Corporation reports the following amounts in…
A: Answer 27) Calculation of Gross Profit Gross Profit = Net Sales – Cost of Goods sold Gross Profit =…
Q: Sarasota Corp. purchased Machine no. 201 on May 1, 2020. The following information relating to…
A: All expenses incurred to bring an asset to a condition where it can be used are capitalized as…
Q: Miracle Corporation reports the following amounts in its December 31, 20XF income statement: Sales…
A: The earnings per share is calculated as net income divided by average number of shares outstanding.
Q: 1. A bank is offering to sell certificates of deposit valued at $ 5,000.00. At the end of 3 years,…
A: Solution:- Given, A Bank Deposited Value = $5,000 At the end of 3 years = $5,310 Interest for 3…
Q: Hope Inc. has the following information: Beginning inventory P 56,000 Purchases 148,000…
A: The question is based on the concept of Cost Accounting. Cost of sales = Beginning inventory +…
Q: 1. Invested $200,000 to start JHJ rental car company 2. Paid cash of $10,000 for supplies 3. Paid…
A: The statement of cash flow (CFS) is prepared by the management to reflect the flow of cash and cash…
Q: BUS 207 - Principles of Accounting I Homework Assignment 2 Chapter 3 The unadjusted and adjusted…
A: Adjusting entries are the entries made at the end of the accounting period to make adjustments of…
Q: e) None of these answers. 9. Ahmed's employer provides him with S150,000 of group term ife insurance…
A: Group Term Life Insurance is a type of insurance offered to a group of people under the same policy.…
Q: a) Php21.82 b) Php19.84 c) Php14.22 d) Php12.24 10. Heinz Inc expects to generate earnings over the…
A: The question is related to Capitalization of earnings method. Estimated Value = Average Annual…
Q: Question 28 X operates a standard marginal costing system. The following budgeted and standard cost…
A: The direct material price variance would be one of two variances being used to evaluate direct…
Q: Both Lauren Jason Who is worse off in this situation? give the money in the first stage. surplus,…
A: whenever 2 person who work together do not trust or corporate with each other then the trust issue…
Q: The purpose of costing are as follows EXCEPT: Price products Make decisions record cost Formulate…
A: The purpose of costing 1. To fix the price of the product 2. For decision making 3. For…
Q: On January 1of the current year, the furniture account had a balance of P 24.000 with accumulated…
A: Depreciation for furniture present at beginning of year = cost ×Depreciation rate
Q: Lily Company needs to determine the amount of inventory in its warehouse at the time that an…
A: Cost of goods available for sale = Beginning inventory + purchases Cost of goods sold = Sales -…
Q: Pritchett Company reported the followtng year-end data: $ 20,100 8, 500 13,400 24,000 6,800 28,000…
A: The current ratio is calculated by dividing the current assets by the current liabilities of the…
Q: Mewto Bank granted a loan to Mew Company on January 1, 2020. The interest on the loan is 12% payable…
A: The loan borrowing and the cost of loan borrowing has a proper mechanism to calculate the cost…
Q: NSTRUCTION 1. Compute the amount to be capitalized as an asset for the lease of the milling machine…
A: Concept of Lease accounting
Q: 70,500 Salary Expense Accounts Receivable 90,000 Accumulated Depreciation-Equipment 14,800 3,600…
A: Income Statement is a part of Financial Statements. It shows the Net Income earned or net loss…
Q: The actual information pertains to the month of June. As part of the budgeting p developed the…
A: Budgeted selling price per unit = Static budgeted sales revenue/sales units
Q: the options 60 3,600 Inventory Inventory Accounts Payable 600 1,200 Cash 600 Cash 2,940 Sales…
A: June 1 Inventory A/c dr. $3600 (30shoes * $120) To Accounts payable.…
Q: During Heaton Company's first two years of operations, it reported absorption costing net operating…
A: The net operating income shows the difference between revenues and operating expenses. The…
Q: Problem 2.30 Systems Concepts, Traditional versus Activity-Based Cost AccountingSystemsThe following…
A: Activity-based costing represents the costing method that assigned the cost to each activity based…
Q: Use the following to answer questions 13 - 17 KMC Corp.'s management is considering either a 100%…
A: Due to stock split the number of outside shares will change.
Q: 4,600 Units in BWIP X Fraction to Complete (60%) 840 Units in EWIP X Fraction Complete (4,000 X 60%)…
A: The word "First-In, First-Out" is "First-In, First-Out." It's a method for calculating the cost of…
Q: On January tof the current year, the furniture account had a balance of P 24.000 with accumulated…
A: Net book value of the assets = Total cost of the assets - Accumulated depreciation where,…
Q: Issue 5,0 s102.50 per share nal shares of preferred stock for 1-Mar 1-Mar Issue 100,000 additional…
A: I am answering the question number 12 as specifically asked by the student. Common shares are…
Q: Which is an incorrect statement below? A. Treasury shares are an entity's own shares that have been…
A: The balance sheet shows the financial statement of the company that represents the assets,…
Q: Concord Corporation purchased for $285,000 a 25% interest in Murphy, Inc. This investment enables…
A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…
Q: The stockholders' equity section on the December 31 balance sheet of Hadley Corporation reported the…
A: Paid in Capital:-It is the cash or other assets given by the investors in exchange for Stocks i.e…
Q: New Gadgets, Incorporated, currently pays no dividend but is expected to pay its first annual…
A: The price of the stock at the end of 6 years is given by: =Dividend at the end of year 7/(Required…
Q: Some accountants believe that deferred taxes should not be recognized for certain temporary…
A: (Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…
Q: As sales manager, John was given the Dunham Company for the month of C
A: In this question, we have to make a flexible budget report.
Q: 1. The following information was reported by Benedict Co. in their financial statements. Current…
A: The Book of Benedict Co. will be equal to the value of Shareholders’ Equity.
Q: King Flute & Instruments is a leading producer of quality instruments based on projection, fuller…
A: The contribution margin can be defined as the process of reducing all fixed costs from sales. The…
Q: Given the building layout for Store A, Store B, Store C, and Store D, what portion of the shared…
A: Cost refers to the amount expended by an entity as a consideration for acquisition of goods or…
Q: apital (P25 par value, 100,000 shares) 2,500,000 Share premium 3,000,000 Retained earnings…
A: Heaven Inc discovered late in 2021 that 2020 depreciation expense was overstated by 500,000.…
Q: 2021 2020 ccounts receivable $775000 $676000 ess: Allowance for doubtful accounts 74000 66000…
A: Calculation of Average collection period Average collection period = 365 days/ Accounts receivable…
Q: You plan on starting a lawn mowing business by investing $700 of your own money and purchasing $500…
A: Computation of budgeted margin per unit is enumerated as below:
Compute the expected
Step by step
Solved in 3 steps
- Being Finance Manager of Salalah Textiles Industries, you need to invest an amount for OMR 50,000 in the investment market. Assume the market rate of return is 0.11, risk free rate of return is 2.75% and Beta is .73, then:Required:a) What should be required rate of return for your investment?Mr. Karim is an investment banking analyst at Benchmark Financial, and hewants to calculate the expected rate of return for a security. He finds that thesystematic risk “b” of the security is 1.2. He also knows that the risk-free rateis 3%, and the expected return of the market is 12%. Mr. Karim uses the CAPMmodel to calculate the expected rate of return and determine if theinvestment should be undertaken. Please show the computation as perdecision taken by Mr. Karim.Sharon Smith, the financial manager for Barnett Corporation, wishes to select one of three prospective investments: X, Y, and Z. Assume that the measure of risk Sharon cares about is an asset's standard deviation. The expected returns and standard deviations of the investments are as follows: Investment Expected return Standard deviation X 17% 7% Y 17% 8% Z 17% 9% a. If Sharon were risk neutral, which investment would she select? Explain why. b. If she were risk averse, which investment would she select? Why? c. If she were risk seeking, which investments would she select? Why? d. Suppose a fourth investment, W, is available. It offers an expected return of 18%,and it has a standard deviation of 9%. If Sharon is risk averse, can you say which investment she will choose? Why or why not? Are there any investments that you are certain she will not choose?
- Rachel is a financial investor who actively buys and sells in the securities market. Now she has a portfolio of all blue chips, including: $13,500 of Share A, $7,600 of Share B, $14,700 of Share C, and $5,500 of Share D. (a) Compute the weights of the assets in Rachel’s portfolio?(b) Find the geometric average return (c)Find the risk free rate of return (d)Find the expected rate of return of the portfolioHailey has identified two companies, Urban Foodies and Wicked Chef, as possible investments. She has estimated the expected performance of the two companies under each of the following economic conditions as follows: Economic conditions Probability of the economic state occurring Rate of return of Urban Foodies Rate of return of Wicked Chef Recession. 0,20 −15% 20% Normal 0,50 20% 30% Boom. 0,30 60% 40% You are required to calculate the expected return of a portfolio consisting of 75% of Urban Foodies and 25% of Wicked Chef. 1. 25,00% 2. 26,50% 3. 32,00% 4. 45,50%John Davidson is an investment adviser at Leeds Asset Management plc. He is asked by a client to evaluate various investment opportunities currently available and he has calculated expected returns and standard deviations for five different well-diversified portfolios of risky assets: Portfolio Expected return Standard deviation Q 7.8% 10.5% R 10.0% 14.0% S 4.6% 5.0% T 11.7% 18.5% U 6.2% 7.5% (a) For each portfolio, calculate the risk premium per unit of risk (Sharpe ratio) that you expect to receive. Assume that the risk-free rate is 3.0%. (b) Using answers from a, which of these five portfolios is most likely to be the market portfolio and explain why. (200 words maximum) (c) If you are only willing to make an investment with a standard deviation of 7.0%, is it possible for you to earn a return of 7.0%? (d) What is the minimum level of risk that would be necessary for an investment to earn 7.0%? What is the composition of the…
- John Davidson is an investment adviser at Leeds Asset Management plc. He is asked by a client to evaluate various investment opportunities currently available and he has calculated expected returns and standard deviations for five different well-diversified portfolios of risky assets: Portfolio Expected return Standard deviation Q 7.8% 10.5% R 10.0% 14.0% S 4.6% 5.0% T 11.7% 18.5% U 6.2% 7.5% (a) For each portfolio, calculate the risk premium per unit of risk (Sharpe ratio) that you expect to receive. Assume that the risk-free rate is 3.0%. (b) Using answers from a, which of these five portfolios is most likely to be the market portfolio and explain why. (200 words maximum)John Davidson is an investment adviser at Leeds Asset Management plc. He is asked by a client to evaluate various investment opportunities currently available and he has calculated expected returns and standard deviations for five different well-diversified portfolios of risky assets: Portfolio Expected return Standard deviation Q 7.8% 10.5% R 10.0% 14.0% S 4.6% 5.0% T 11.7% 18.5% U 6.2% 7.5% (a) For each portfolio, calculate the risk premium per unit of risk (Sharpe ratio) that you expect to receive. Assume that the risk-free rate is 3.0%.Jerry Allen graduated from the University of Arizona with a degree in Finance in 2011 and took a job with an investment banking firm as a financial analyst. One of his first assignment is to investigate the investor-expected rate of return for technology firms: Apple (APPL), Dell (DELL) and Hewlett Packard (HPQ). Jerry’s supervisor suggested that he make his estimates using CAPM where the risk-free rate is 4.5%. the expected return on the market is 10.5% 1. Calculate the risk premium of the market show all the working formula where applicable
- Jerry Allen graduated from the University of Arizona with a degree in Finance in 2011 and took a job with an investment banking firm as a financial analyst. One of his first assignment is to investigate the investor-expected rate of return for technology firms: Apple (APPL), Dell (DELL) and Hewlett Packard (HPQ). Jerry’s supervisor suggested that he make his estimates using CAPM where the risk-free rate is 4.5%. the expected return on the market is 10.5% 1. Calculate the risk premium of the market show all the working formula where applicable/ 2. Calculate the expected return using CAPM equation using a beta coefficient of 2.00 3. Solve the expected return for Apple using the beta from Yahoo and the beta from MSN and a risk-free rate of 4.5% and a market risk premium of 6% yield 4. Calculate the expected return with the CAPM equation using each of the following beta estimates for the three technology firms. Present the information in a tabulated formatMs. B has $1000 to invest. She is considering investing in the common stock of company M. In addition, Ms. B will either borrow or lend at the risk-free rate. Ms. B decide to invest $350 in common stock of company M and $650 placed in the risk- free asset. The relevant parameters are 1) What is the expected return? 2) What is the variance of the portfolio? 3) What is the standard deviation of the portfolio?Jerry Allen graduated from the University of Arizona with a degree in Finance in 2011 and took a job with an investment banking firm as a financial analyst. One of his first assignment is to investigate the investor-expected rate of return for technology firms: Apple (APPL), Dell (DELL) and Hewlett Packard (HPQ). Jerry’s supervisor suggested that he make his estimates using CAPM where the risk-free rate is 4.5%. the expected return on the market is 10.5% 2. Calculate the expected return using CAPM equation using a beta coefficient of 2.00 3. Solve the expected return for Apple using the beta from Yahoo and the beta from MSN and a risk-free rate of 4.5% and a market risk premium of 6% yield 4. Calculate the expected return with the CAPM equation using each of the following beta estimates for the three technology firms. Present the information in a tabulated format Answer text Question 8 Rich text editor
