Transit Design Inc. recently paid a $1.00 dividend, has a beta of 0.75, has determined that the market risk premium is 10% and the current risk-free rate is 4%. What is the firm's required return on equity?
A) 14.00%
B) 14.50%
C) 11.50%
D) 8.50%
C
Explanation: C) r = rf + beta (rm - rf) = 4% + 0.75 * 10% = 11.50%.
You might also like to view...
Equal monthly rental payments for a particular lease should be charged to rental expenses by the lessee in a capital lease.
Materials purchased on account during the month amounted to $195,000. Materials requisitioned and placed in production totaled $168,000. From the following, select the entry to record the transaction on the day the materials were bought
A) Materials 168,000Accounts Payable 168,000 B) Materials 195,000Accounts Payable 195,000 C) Materials 195,000Cash 195,000 D) Accounts Payable 195,000Materials 195,000
Inventory held downstream of the bottleneck process is represents which of the following?
a. Drum b. Buffer c. Rope d. Neither the drum, buffer, nor the rope
Calculate the percent increase or decrease for each of the following financial statement items:? Year 2 Year 1Cash$ 37,500$ 30,000Accounts receivable63,00052,500Inventory67,50090,000Accounts payable35,10027,000Sales187,500150,000Equipment165,000125,000?
What will be an ideal response?