A licensee is working with an investor who is interested in purchasing a small apartment complex. The property has six units ren

a. 11.5% Explanation: Fad followers are investors who join trends as they appear, resulting in their betas being lower than that of informed investors, who make moves beforehand. By applying the Capital Asset Pricing Model for expected return calculation. Er = Rf + b( Rm - Rf) Er = Expected return Rf = Risk Free Rate b = Beta Rm = Market Return. The expected return for informed investors is, = 4% + 1.4 ( 10% - 4%) = 4% + 1.4 ( 6%) = 12.4% Given that fad followers have a lower beta, implying a lower expected return in comparison to informed investors, the only viable choice is 11.5%.

Answer:

MVA = (Outstanding shares * Stock cost) - Total common equity

Explanation:

The market value added indicates how much the equity exceeds its book value. It reflects the difference between investments made by shareholders and the funds they would receive if the company were sold. A higher MVA indicates better performance from company management, which benefits shareholders.

Answer:

Upon issuance, Ozark should "Credit premium on bonds payable $100,000"

Explanation:

The bond issue price is calculated as ($10 million * $101) = $10,100,000

The bond's face value is = $10,000,000

The bond premium equals $10,100,000 - $10,000,000

Thus, the bond premium is $100,000

                                   Journal entry

                                                    Debit                   Credit

Cash                                        $10,100,000

Premium on bonds payable                                $100,000

Bonds payable                                                     $10,000,000

Conclusion: Therefore, upon issuance, Ozark should "Credit premium on bonds payable $100,000"