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NEW QUESTION: 1
A. Option B
B. Option A
C. Option C
D. Option D
Answer: B
NEW QUESTION: 2
According to IDC, what is the attitude of most Global 500 companies toward digital transformation?
A. They are waiting to see if their competitors are successful in implementing it.
B. They are skeptical that it will provide a return on investment.
C. They are committed to it and have formed dedicated digital transformations teams.
D. They have completed their digital transformation products and are turning their attention to the next trend.
Answer: C
NEW QUESTION: 3
Consider the following information:
30 day T-Bill rate (Risk free rate) 8.0%
Common stock Beta 1.2
Expected rate of return for the market 12.0%
Asset turnover ratio 3.4x
Calculate this firm's cost of retained earnings using the CAPM approach.
A. 9.6%
B. 12.8%
C. 8.0%
D. 12.0%
E. 27.2%
F. 43.52%
Answer: B
Explanation:
Explanation/Reference:
Explanation:
To calculate the cost of retained earnings for a firm using CAPM, one may use the following formula: Cost of retained earnings = risk free rate + [(expected rate of return on the market - risk free rate) x Beta]. In this case, the cost of retained earnings = 8.0% + [(12.0% - 8.0%) x 1.2] = 12.8%.