Question on rate of return

Assignment Help Accounting Basics
Reference no: EM13116013

The ABC Co. has no debt in its capital structure, a beta of 0.8, and raises all funds through sale of common stock. The current market rate for similar stock is 14% and the risk-free rate is 6%. The firm is considering a project with a return of 12.9%. Should it accept the project, and if so why (Show all work).

Reference no: EM13116013

Questions Cloud

Evaluate what is the speed of lillian and her dog : Lillian (mass 32.0 kg) standing on slippery ice catches her leaping dog (mass 15 kg) moving horizontally at 2.0 m/s. Evaluate what is the speed of Lillian and her dog after the catch?
Probability distribution of car arrivals : The number of cars arriving at Joe Kelly's oil change and tune-up place during the last 200 hours of operation is observed to be the following: Determine the probability distribution of car arrivals.
How would you explain the differences in ear shape : Two mice of the same species have different ear shapes. You find that one mouse, having normal shaped ears, was caught in a field in Kenya.
How each medium enables e-comerce analyze each behavior : Explain- How each medium enables e-comerce Analyze- each behavior using the. The analysis should include descriptions of purpose,sender, receiver.
Question on rate of return : The ABC Co. has no debt in its capital structure, a beta of 0.8, and raises all funds through sale of common stock. The current market rate for similar stock is 14% and the risk-free rate is 6%.
What is the advantage to the species : Even though adult sponges do not relocate, why can the species still be considered motile? What is the advantage to the species?
Illustrate what is the coefficient of kinetic friction : Sam's speed at the bottom is 35.0. Illustrate what is the coefficient of kinetic friction of his skis on snow?
Would amylase isolated from any two organisms : Would amylase isolated from any two organisms (for example, fish amylase vs. amylase from the small intestine of humans) show the same temperature optimum? Explain your answer.
Question regarding value of common stock : A firm has experienced a constant annual rate of dividend growth of 9 percent on its common stock and expects the dividend per share in the coming year to be $2.70.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Year end accounts receivable

An auditor noted that client sales increased 10 percent for the year. At the same time, Cost of Goods Sold as a percentage of sales had decreased from 45 percent to 40 percent and year-end accounts receivable.

  Four elements of budgeting cycle

Discuss the four elements of the budgeting cycle. What are the human aspects of budgeting? Do you have a budget for personal expenses? Does it work?

  Implementing the change to equity method

Gerken Company concluded at the beginning of 2013 that the company's ownership interest in DillCo had increased to the point that it became appropriate to begin using the equity method to account for the investment.

  Analyse a set of financial statements

PM 106:  Learning outcomes to be examined in this assessment: Analyse a set of financial statements including Income Statement, Statement of Financial Position and Statement cash flows.

  Management assertions and quantifying materiality

What are management assertions? How do they affect the financial statements? How does the auditor formulate audit objectives based on management assertions?

  Five biggest concerns regarding risk

You're an IT auditor working for $15 million sales per year speciality chocolate candy manufacturer. The company is planning to engage in e-commerce over Internet. What would be your five biggest concerns regarding risk and why?

  Proper accounting treatment of machine

Discuss the proper accounting treatment of $273,000 ($714,000 − $441,000) by which the cost of the first machine exceeded the cost of subsequent machines.

  Property tax exclusions and gains

Mathew Murphy, single, sold his home that he had owned for 20 years for $670,000. He purchased it for $110,000 and made $40,000 of capital improvements on the home during his time of ownership. a) How much gain is excluded? How much is recognized?

  Euro currency markets

What are the Euro Currency Markets and how is it employed in global financing operations and explain its importance in manageing risks?

  Contango market and backwardation market

Write down the difference between a contango market and a backwardation market. What exactly is meant by a basis?

  Significance and usefulness of accounting cycle

Please discuss the value of the accounting cycle to the including:

  Determining accounting systems

What is XBRL? How will it effect financial reporting? Please Explain. What are the main types of accounting software used in a restaurant setting or organization? What are the benefits and limitations of this software? Please Explain.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd