A manager believes his firm will earn a 16.9 percent return next year. His firm has a beta of 1.59, the expected return on the market is 14.9 percent, and the risk-free rate is 4.9 percent. Compute the return the firm should earn given its level of risk and determine whether the manager is saying the firm is under-valued or over-valued.

Answer:

Return = 20.8%.

It is overvalued

Explanation:

The capital asset pricing model is a risk-based model. Here, the return on equity is dependent on the level of reaction of the the equity to changes in the return on a market portfolio. These changes are captured as systematic risk. The magnitude by which a stock is affected by systematic risk is measured by beta.

Under CAPM, Ke= Rf + β(Rm-Rf)

Rf-risk-free rate (treasury bill rate), β= Beta, Rm= Return on market.

Rf- 4.9% , Rm- 14.9%, β-1.59

Using this model,

Ke= 4.9% + 1.59×(14.9%-4.9%)

= 20.8%

Return = 20.8%.

The CAPM is greater than the expected return, hence the firm is overvalued

You are scheduled to receive annual payments of $11,100 for each of the next 24 years. Your discount rate is 10 percent. What is the difference in the present value if you receive these payments at the beginning of each year rather than at the end of each year

You and another project manager disagree over whether a team member should work on your team or on her team. You decide that the team member can work for the other project manager in the afternoon and the other project manager says it is OK for the team member to work for you in the morning. The truth is you both wanted this person fulltime. The conflict resolution approach you have both used is:

High-Low Method The manufacturing costs of Ackerman Industries for the first three months of the year follow: Total Costs Units Produced January $1,900,000 20,000 units February 2,250,000 27,000 March 2,400,000 30,000 Using the high-low method, determine (a) the variable cost per unit and (b) the total fixed cost. a. Variable cost per unit $fill in the blank 1 b. Total fixed cost $fill in the blank 2

Suppose that unskilled workers find it worthwhile to acquire skills when the wage differential between skilled and unskilled workers reach a certain threshold. Explain the effects on the supply of unskilled workers, the supply of skilled workers, and the equilibrium wage for the two groups. In particular what is the equilibrium wage of skilled workers relative to unskilled workers after some unskilled workers receive training

The following financial information is presented for three different companies. Determine the missing amounts.
Allen Bast Corr
Cosmetics Grocery Wholesalers
Sales revenue $90,000 $122,000
Sales returns and allowances 5,000 12,000
Net sales 86,000 95,000
Cost of goods sold 56,000 86,000
Gross profit 38,000 24,000
Operating expenses 15,000 18,000
Income from operations 4,000 7,000
Other expenses and losses 15,000 6,000
Net income 11,000 5,000

Given the following production plan, use a chase production strategy to compute the monthly production, ending inventory/(backlog), net requirements and required workforce levels. A worker can produce 100 units per month. Assume that the beginning inventory in January is 2200 units, and the firm desires to have 1000 units of inventory at the end of December. Month Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Demand 15,400 13,250 9,000 9,700 14,650 16,000 22,400 23,100 19,050 17,400 14,000 12,300 What month requires the most workers

Pablo, a resident of New Mexico, while driving through Arizona was struck by an SUV driven by Drew, a resident of California. Drew was speeding when the accident happened and Pablo suffered severe injuries that ruined a potential acting career. Pablo's damages are estimated at $200,000. Select the BEST answer to the following questions: (1) What type of legal claim is Pablo likely to file

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Eclipse Solar Company operates two factories. The company applies factory overhead to jobs on the basis of machine hours in Factory 1 and on the basis of direct labor hours in Factory 2. Estimated factory overhead costs, direct labor hours, and machine hours are as follows: Factory 1 Factory 2 Estimated factory overhead cost for fiscal year beginning August 1 $18,500,000 $44,000,000 Estimated direct labor hours for year 800,000 Estimated machine hours for year 1,250,000 Actual factory overhead costs for August $1,515,800 $3,606,300 Actual direct labor hours for August 64,500 Actual machine hours for August 105,000 Required: a. Determine the factory overhead rate for Factory 1. Round your answer to two decimal places. b. Determine the factory overhead rate for Factory 2. c. Journalize the Aug. 31 entries to apply factory overhead to production in each factory. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for spaces or journal explanations. Every line on a journal page is used for debit or credit entries. Do not add explanations or skip a line between journal entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. d. Determine the balances of the factory overhead accounts for each factory as of August 31, and indicate whether the amounts represent overapplied factory overhead or underapplied factory overhead. Enter all amounts as positive numbers.

As of December 31, 2020, Gill Co. reported accounts receivable of $236,000 and an allowance for uncollectible accounts of $8,400. During 2021, accounts receivable increased by $22,300, (that change includes $7,400 of bad debts that were written off). An analysis of Gill Co.'s December 31, 2021, accounts receivable suggests that the allowance for uncollectible accounts should be 1% of accounts receivable. Bad debt expense for 2021 would be:

A 10,000 par value bond with coupons at 8%, convertible semiannually, is being sold three years and four months before the bond matures. The purchase will yield 6%convertible semiannually to the buyer. The price at the most recent coupon date, immediately after the coupon payment, was 5,640.Calculate the market (quoted) price of the bond.

In its first year of operations, Ivanhoe Company recognized $29,800 in service revenue, $7,000 of which was on account and still outstanding at year-end. The remaining $22,800 was received in cash from customers. The company incurred operating expenses of $19,000. Of these expenses, $13,140 were paid in cash; $5,860 was still owed on account at year-end. In addition, Ivanhoe prepaid $3,150 for insurance coverage that would not be used until the second year of operations.

(a) Calculate the first year’s net earnings under the cash basis of accounting, and the first year’s net earnings under the accrual basis of accounting.

Use the following information to answer this question. Windswept, Inc. 2017 Income Statement ($ in millions) Net sales $ 10,000 Cost of goods sold 7,950 Depreciation 410 Earnings before interest and taxes $ 1,640 Interest paid 100 Taxable income $ 1,540 Taxes 539 Net income $ 1,001 Windswept, Inc. 2016 and 2017 Balance Sheets ($ in millions) 2016 2017 2016 2017 Cash $ 270 $ 300 Accounts payable $ 1,630 $ 1,812 Accounts rec. 1,110 1,010 Long-term debt 1,070 1,383 Inventory 1,780 1,755 Common stock 3,360 3,030 Total $ 3,160 $ 3,065 Retained earnings 650 900 Net fixed assets 3,550 4,060 Total assets $ 6,710 $ 7,125 Total liab. & equity $ 6,710 $ 7,125
What is the cash coverage ratio for 2017?

On December 27, 2020, Roberta purchased four tickets to a charity ball sponsored by the city of San Diego for the benefit of underprivileged children. Each ticket cost $275 and had a fair market value of $55. On the same day as the purchase, Roberta gave the tickets to the minister of her church for personal use by his family. At the time of the gift of the tickets, Roberta pledged $8,050 to the building fund of her church. The pledge was satisfied by a check dated December 31, 2020, but not mailed until January 3, 2021.

Required:
a. Presuming Roberta is a cash basis and calendar year taxpayer, she can deduct $_______ for the tickets and for the pledge as a charitable contribution for 2018.
b. Would the amount of the deduction be any different if Roberta were an accrual basis taxpayer?

Petty Cash Record and Journal Entries On May 1, a petty cash fund was established for $153.00. The following vouchers were issued during May: Date Voucher No. Purpose Amount May 1 1 postage due $ 3.10 3 2 office supplies 13.00 5 3 auto repair (miscellaneous) 46.00 7 4 drawing (Joy Adams) 24.00 11 5 donation (Red Cross) 9.00 15 6 travel expenses 23.00 22 7 postage stamps 2.90 26 8 phone call 7.00 30 9 donation (Boy Scouts) 22.00 Required: 1. Prepare the journal entry to establish the petty cash fund. If an amount box does not require an entry, leave it blank. 2. Record the vouchers in the petty cash record. Total each column to determine the balance before replenishing the petty cash fund. When required, enter amounts in dollars and cents. 3. Prepare the journal entry to replenish the petty cash fund. Then record the amount in the petty cash record in part 2. If an amount box does not require an entry, leave it blank.

A particular forecasting model was used to forecast a six-month period. Here are the forecasts and actual demands that resulted: FORECAST ACTUAL April 256 232 May 330 300 June 406 460 July 355 433 August 380 490 September 456 514 a. Find the tracking signal for each month. (Negative values should be indicated by a minus sign. Round your answers to the 2 decimal places.)

Zia Co. makes flower pots from recycled plastic in two departments, molding and packaging. At the beginning of the month, the molding department has 4,100 units in inventory, 70% complete as to materials. During the month, the molding department started 28,500 units. At the end of the month, the molding department had 6,150 units in ending inventory, 80% complete as to materials. Units completed in the molding department are transferred into the packaging department. Cost information for the molding department for the month follows: Beginning work in process inventory (direct materials) $ 3,300 Direct materials added during the month 48,900Using the weighted-average method, assign direct materials costs to the molding department’s output—specifically, the units transferred out to the packaging department and the units that remain in process in the molding department at month-end. (Do not round intermediate calculations.)Weighted Average MethodCost of units transferred out____Direct Materials____Cost of ending work in progress____Direct Materials____Total cost assigned____

WHOEVER CAN GUESS MY PATRONUS IN HARRY POTTER AND WHAT HOUSE I AM IN FIRST WILL GET BRAINLIEST AND 30 POINTS

Martinez Company sells goods to Danone Inc. by accepting a note receivable on January 2, 2020. The goods have a sales price of $639,100 (cost of $480,000). The terms are net 30. If Danone pays within 5 days, however, it receives a cash discount of $9,100. Past history indicates that the cash discount will be taken. On January 28, 2020, Danone makes payment to Martinez for the full sales price. (a) Prepare the journal entry(ies) to record the sale and related cost of goods sold for Martinez Company on January 2, 2020, and the payment on January 28, 2020. Assume that Martinez Company records the January 2, 2020, transaction using the net method.

What is the expected return on Andre’s stock portfolio? 9.70% 13.10% 14.55% 7.28% Suppose each stock in Andre’s portfolio has a correlation coefficient of 0.4 (rho = 0.4) with each of the other stocks. If the weighted average of the risk of the individual securities (as measured by their standard deviations) included in the partially diversified four-stock portfolio is 36%, the portfolio’s standard deviation ( σp ) most likely is 36%.

Use the information below for questions 1 through 3. Dallas Cowboys Pro Shop produce two types of jerseys for their fan-base to purchase: elite game jersey and limited player jersey. Cowboys Pro Shop determined 20% of the fans do not buy either jersey, 55% buy the elite game jersey, and 25% buy both jerseys, and these percentages are relatively constant from one year to another. There are (hypothetically) 100 fans each year. Q1. How many jerseys should the Pro Shop expect to sell to in a year

On September 30, 2021, Bricker Enterprises purchased a machine for $209,000. The estimated service life is 10 years with a $24,000 residual value. Bricker records partial-year depreciation based on the number of months in service. Depreciation for 2021 using the straight-line method is:

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. Piedmont Dairy Products, Inc. has the opportunity to purchase a processing plant from a bankrupt competitor for $4,500,000. Piedmont estimates that the plant could generate $2,430,000 of cash flow per year for the next 3 years. At the end of the third year, the plant would require a costly overhaul, so Piedmont would shut it down, and they estimate that the proceeds of selling off the equipment would just equal the cost of required environmental remediation. What rate of return does Piedmont estimate that this investment opportunity would provide

Which of these statements about a franchisee is true?
OA. They are able to make all the business decisions.
OB. They are able to use their creativity to modify any aspect of the business.
Oc. They are able to introduce new products in the market without the franchisor's approval.
OD. They are able to use a franchisor's proven business systems and processes.
O E. They are able to guarantee the success of the franchisor's business.

What effect will each of the following have on the demand for small automobiles such as the Mini-Cooper and Fiat 500? a. Small automobiles become more fashionable: No change . b. The price of large automobiles rises (with the price of small autos remaining the same): (Click to select) . c. Income declines and small autos are an inferior good: (Click to select) . d. Consumers anticipate that the price of small autos will greatly come down in the near future: (Click to select) . e. The price of gasoline substantially drops: (Click to select) .

Sally agrees to roof a house for Bob.After doing his research,Bob chooses Sally based on her great reputation for being conscientious and doing good work.Bob knows little about roofing and stays away from all the noise involved.Sally provides her own tools for herself and other workers,sets her own schedule,and charges a flat rate of $10,000 to be paid when the job is completed.Sally hires Trudy,Glen,and Fred to help with the roofing.She pays them an hourly rate,supervises their work,provides them with tools and materials,and sets their schedules.Curious about what is going on there,Bob's friend Spencer walks by the house while the roofing is being done.Glen absentmindedly throws some old shingles off the roof and hits Spencer in the head,resulting in him going to the local emergency room and receiving a couple of stitches in his scalp.Spencer decides to sue all the roofers,Bob,and Sally for his hospital expenses and for pain and suffering.Which of the following is the most likely characterization of Trudy,Glen,and Fred in relation to Sally?
A) They are both employees and independent contractors.
B) They are employees.
C) They are independent contractors.
D) They are undisclosed principals.
E) They are both employees and disclosed principals.

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Suppose banks keep no excess reserves and that all banks are currently meeting the reserve requirement. The Federal Reserve then makes an open market purchase of ​$ from Bank 1. Use the​ T-account below to show the result of this transaction for Bank​ 1, assuming Bank 1 keeps no excess reserves after the transaction. Bank​ 1's Account Assets Liabilities Reserves Deposits Loans Securities

An encyclopedia is an example of a periodical.
O True
O False