Questions
You are opening a landscaping business, and wish to estimate your levered cost of equity. Beatrice's...
You are opening a landscaping business, and wish to estimate your levered cost of equity. Beatrice's Yard Maintenance has an equity beta of 1.3, and a D/E ration of 0.8. If the riskless rate is 0.04, the expected return on the S&P500 is 0.14, and your firm will have a D/E ratio of 1, what would your firm's levered cost of equity be if the tax rate is 0.31? Please give your answer in the form of a decimal to 2 places - if your answer is 10.5%, please enter 0.105.
In: Finance
Two stocks each pay a $1 dividend that is growing annually at 4 percent. Stock A's beta = 1.3; stock B's beta = 0.8.
Two stocks each pay a $1 dividend that is growing annually at 4 percent. Stock A's beta = 1.3; stock B's beta = 0.8.
a. Which stock is more volatile?
b. If Treasury bills yield 2 percent and you expect the market to rise by 8 percent, what is your risk-adjusted required return for each stock?
c. Using the dividend-growth model, what is the maximum price you would be willing to pay for each stock?
d. Why are their valuations different?
In: Finance
An employee receives an hourly wage rate of $16, with time-and-a-half for all hours worked in excess of 40 during the week.
An employee receives an hourly wage rate of $16, with time-and-a-half for all hours worked in excess of 40 during the week. Payroll data for the current week are as follows: hours worked, 47; federal income tax withheld, $145; social security tax rate, 6.0%; Medicare tax rate, 1.5%; state unemployment compensation tax, 3.4% on the first $7,000; and federal unemployment compensation tax, 0.8% on the first $7,000. What is the net amount to be paid to the employee? Round your answer to the nearest cent.
In: Accounting
6. Changes in taxes The following graph shows the aggregate demand curve. Shift the aggregate demand...
6. Changes in taxes
The following graph shows the aggregate demand curve.
Shift the aggregate demand curve on the graph to show the impact of a tax cut.
Suppose the governments of two different economies, economy X and economy Y, implement a permanent tax cut of the same size. The marginal propensity to consume (MPC) in economy X is 0.75 and the MPC in economy Y is 0.8. The economies are identical in all other respects.
The tax cut will have a larger impact on aggregate demand in the economy with the (larger MPC/ smaller MPC)
In: Economics
Future value of an ordinary annuity. Fill in the missing futurevalues in the following table...
Future value of an ordinary annuity. Fill in the missing future values in the following table for an ordinary annuity:
Number of Payments or Years | Annual Interest Rate | Present Value | Annuity | Future Value | ||||
6 | 7% | 0 |
| $270.26 | ||||
(Click on the following icon in order to copy its contents into a spreadsheet.)
Number of Payments or Years | Annual Interest Rate | Present Value | Annuity | Future Value | ||||
6 | 7% | 0 |
| $270.26 | ? | |||
17 | 15% | 0 | $1,261.39 | ? | ||||
27 | 3.5% | 0 | $732.59 | ? | ||||
320 | 0.8% | 0 | $503.85 | ? | ||||
In: Finance
Assume that today is October 15th. It is known that a certainTreasury bond is the...
Assume that today is October 15th. It is known that a certain Treasury bond is the cheapest to deliver bond on the Treasury futures contract. The cheapest to deliver bond has a 5% coupon and the last coupon payment was on June 3rd. Today’s quoted price for the bond is $92. The first day that delivery can take place is December 20th. Assume that the term structure of interest rates is constant and the rate of interest (based on continuous compounding) is equal to 6%. If the conversion factor for the cheapest to deliver bond is 0.8, what is the Treasury futures price?
In: Finance
The expected return on Big Time Toys is 11 percent and its standard deviation is 19...
The expected return on Big Time Toys is 11 percent and its standard deviation is 19 percent. The expected return on Chemical Industries is -1 percent and its standard deviation is 23 percent. Suppose the correlation coefficient for the two stocks' returns is 0.8. What are the expected and standard deviation of a portfolio with 70 percent invested in Big Time Toys and the rest in Chemical Industries?
Enter your answers as percentages rounded to 2 decimal places. Do not include the percentage sign in your answers.
E(rp) =
Std. Dev.=
In: Finance
Net U.S. energy imports have decreased every year since 2016. Last year’s change in net energy...
Net U.S. energy imports have decreased every year since 2016. Last year’s change in net energy trade (crude oil, natural gas, coal, and petroleum products) in the U.S.—from 3.6 quads of net imports in 2018 to 0.8 quads of net exports in 2019—was the largest change in U.S. energy trade since 1980. How would the current low oil price affect the U.S. crude oil trade (import and export) in 2020? Apply the D-S (demand, supply) model.
In: Economics
A shop sells a chicken pasta dish. The main ingredients are pasta, chicken and sauce. Each...
A shop sells a chicken pasta dish. The main ingredients are pasta, chicken and sauce. Each chicken pasta dish contains 250grams of pasta and 100gram of chicken. The price of a pack of 500 grams of pasta is normally distributed with mean $1 and variance $0.4. The price of a pack of 200 grams of chicken is normally distributed with mean $2 and variance $0.8. The sauce in each chicken pasta dish costs $0.5.
What distribution does the total cost of one chicken pasta dish follow? [6 Marks]
In: Statistics and Probability
Be sure to answer all parts. Absorbance values for five standard solutions of a colored solute...
Be sure to answer all parts.
Absorbance values for five standard solutions of a colored
solute were determined at 410 nm with a 1.00−cm
path length, giving the following table of data:
| Solute concentration (M) | A |
| 0.250 | 0.100 |
| 0.500 | 0.200 |
| 0.750 | 0.300 |
| 1.000 | 0.400 |
| 1.250 | 0.500 |
Determine the absorbance values you would expect for
solutions with the following concentrations:
0.4 M
______
0.6 M
______
0.8 M
______
1.1 M
______
Calculate the average molar absorptivity of the
compound.
_____ 1/(M*cm)
In: Chemistry