hELLP A,B,C OR D 1) Assume ¥102.36 equal $1. Also assume that SKr6.5103 equal $1
ID: 2752147 • Letter: H
Question
hELLP A,B,C OR D
1) Assume ¥102.36 equal $1. Also assume that SKr6.5103 equal $1. How many Japanese yen can you acquire in exchange for 5,000 Swedish kronor?
A ¥318
B ¥261
C ¥49,520
D ¥78,614
2) Which one of the following statements related to the capital asset pricing model approach to equity valuation is correct? Assume the firm uses debt in its capital structure.
A The model generally produces the same cost of equity as the dividend growth model.
B The model is dependent upon a reliable estimate of the market risk premium.
C This approach generally produces a cost of equity that equals the firm's overall cost of capital.
D The model applies only to non-dividend-paying firms.
hELLP A,B,C OR D
1) Assume ¥102.36 equal $1. Also assume that SKr6.5103 equal $1. How many Japanese yen can you acquire in exchange for 5,000 Swedish kronor?
A ¥318
B ¥261
C ¥49,520
D ¥78,614
2) Which one of the following statements related to the capital asset pricing model approach to equity valuation is correct? Assume the firm uses debt in its capital structure.
Explanation / Answer
Answer: D Yen 78614
Answer (B)
The model is dependent upon a reliable estimate of the market risk premium.
capital asset pricing model approach to equity valuation
Requited Return = Risk Free Rate+ Beta*Market Risk Premium
1 $ Yen 102.36 1$ SKr 6.5103 Yen/ SKr = Yen/ $ * $/SKr Yen/ SKr = 102.36 * (1/6.5103) 1 SKr = Yen (102.36/6.5103) 5000 SKr = Yen (5000*(102.36/6.5103)) 5000 SKr = Yen 78614Related Questions
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