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Author Question: In several states requiring no-fault insurance, A) you are not required to carry personal ... (Read 15 times)

olgavictoria

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on: Jul 11, 2018
In several states requiring no-fault insurance,
 
  A)
 
  you are not required to carry personal injury protection.
  B)
 
  you may sue for physical injuries only if your damages are above either a monetary or verbal threshold defined in state law.
  C)
 
  you may sue only for recovery of the deductible on your no-fault policy.
  D)
 
  no-fault covers only property damage.

Question 2

Marvelous at the Mall Inc. has a before-tax cost of debt of 8.00, but the risk-free rate is only 3.00. If the market risk premium for equity is 6.00 and the firm has a beta of 1.25, what is the required return on equity for the firm?
 
  A) 10.50
  B) 11.00
  C) 11.50
  D) 12.00


softEldritch

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Reply #1 on: Jul 11, 2018
Answer to Question 1

B

Answer to Question 2

A
Explanation: A) ke = rf + beta  (Mkt risk premium) = 3 + 1.25 (6) = 10.50.


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