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Author Question: What is the significance of industry risk premium and specific company risk premium? What will be ... (Read 187 times)

tsand2

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on: Jul 6, 2018
What is the significance of industry risk premium and specific company risk premium?
 
  What will be an ideal response?

Question 2

Closing entries are prepared to close the
 a. temporary accounts.
   b. accumulated depreciation accounts.
   c. owner's Capital account.
   d. Wages Payable account.
   e. payables and receivables.


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djofnc

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Reply #1 on: Jul 6, 2018
Answer to Question 1

The industry risk premium is the additional return required to compensate investors for investing in a particular industry. This premium reflects the risk of an industry relative to the risk of the market as a whole. Forensic accountants use authoritative third-party data sources to determine industry risk premiums.
The specific company risk premium is the additional return required to compensate investors for investing in the specific company. This factor reflects the risk of a company relative to other companies in the same industry, due to issues such as depth of management, customer concentration, financial strength, labor constraints, and pending litigation. Although forensic accountants can use market research to evaluate these factors, their quantification is largely based on professional judgment.

Answer to Question 2

a


tsand2

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Reply 2 on: Jul 6, 2018
Thanks for the timely response, appreciate it

jamesnevil303

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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