Question: PLEASE SOLVE 8b) (b) Suppose in a market the average return on common stock is 10 percent, while the return on government bond is 6

PLEASE SOLVE 8b) (b) Suppose in a market the average return

PLEASE SOLVE 8b)

(b) Suppose in a market the average return on common stock is 10 percent, while the return on government bond is 6 percent. Find out the cost of capital using CAPM if: (i) risk associated with the firm in question B=1, (ii) B=0.5. 4+2 8. (a) What is Economic Order Quantity (ECO)? (b) Company XYZ faces an annual demand of 5,40,000 units. The purchase price of stock is Rs. 24 per thousand units, with a cost of ordering of Rs. 4. The cost of holding stock is 20 percent of average stock value. Find the optimum order quantity and minimum acquisition cost. 2+4 9. Describe briefly the Japanese model of governance. What are its merits and demerits? How does it differ from the Anglo-American model? 2+2+2

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