Homework Answers
Required rate of return can be calculate using CAPM formula
=Risk Free Rate+Beta*(Market Return-Risk Free Rate)
Components of required rate of return are risk free rate, beta and
market return.
It is an important calculation because it is used to calculate
hurdle rate for investing in calculation of project. It is also
used to calculate cost of equity and also WACC. This can be used to
evaluate projects and whether to accept or reject a
project.
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2. What are the components of "Required Rate of Return" and why is it an important...
what is required rate of return (RRR) ? Why RRR is important for the investor ?...
what is required rate of return (RRR) ? Why RRR is important for the investor ? as an investor , would you expect the required rate of return for investing in usa common stocks to be the same as the required rate of return on japaneese common stocks ? what factors would determine the required rate of return for stocks ?
What are the major components of the income statement? Why is it important for a business...
What are the major components of the income statement? Why is it important for a business to have an accurate income statement?
When comparing the rate of return on various assets, what is the most important consideration and...
When comparing the rate of return on various assets, what is the most important consideration and why?
1. Why financial reporting is important for investors, creditors and other users? 2. What kind of...
1. Why financial reporting is important for investors, creditors and other users? 2. What kind of ethical issues might managers face in dealing with confidential information? 3. Please decompose Return on Assets into two components, and explain briefly each of these two components.
1. Why financial reporting is important for investors, creditors and other users? 2. What kind of...
1. Why financial reporting is important for investors, creditors and other users? 2. What kind of ethical issues might managers face in dealing with confidential information? 3. Please decompose Return on Assets into two components, and explain briefly each of these two components.
Question 1 5 pts What is WACC? Why is it important? O The firm's required return....
Question 1 5 pts What is WACC? Why is it important? O The firm's required return. It is used as the discount rate in NPV and it is used to compare to IRR. O It is the required return on debt. O It is the firm's required return. If IRR is less than WACC, you should accept the project. O It is the required return on equity. Question 2 5 pts What are some of the issues with the payback...
Q1. What are the important components of a shared document folder, and why do we use...
Q1. What are the important components of a shared document folder, and why do we use them for audits? Q2. What differences exist between the tasks of internal or external auditors? Are continuous audits done by one, either or both? Q3. What is the importance of time stamping documents? What other components might be important as documents are changed? Initials of the auditor? Notations of changes made?
1. Explain and discuss the importance of time value of money when evaluating different investments or...
1. Explain and discuss the importance of time value of money when evaluating different investments or capital expenditures. 2. What are the components of "Required Rate of Return" and why is it an important calculation?
Assume that the risk-free rate is 5.5% and the required return on the market is 8%. What is the required rate of return...
Assume that the risk-free rate is 5.5% and the required return on the market is 8%. What is the required rate of return on a stock with a beta of 2? Round your answer to two decimal places.
With reference to the components of a major incident plan, explain why it is important to...
With reference to the components of a major incident plan, explain why it is important to have a comprehensive major incident plan when dealing with a mass disaster and what that plan should include.
Question 1 5 pts What is WACC? Why is it important? O The firm's required return. It is used as the discount rate in NPV and it is used to compare to IRR. O It is the required return on debt. O It is the firm's required return. If IRR is less than WACC, you should accept the project. O It is the required return on equity. Question 2 5 pts What are some of the issues with the payback...
1. Explain and discuss the importance of time value of money when evaluating different investments or capital expenditures. 2. What are the components of "Required Rate of Return" and why is it an important calculation?
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