Answer:
1.82%
Explanation:
Calculation for the return on the stock
Using this formula
Return=(Sales of stock - Stock bought today+Dividend)/Sales of stock
Let plug in the formula
Return = (54 - 55 + 2)/55
Return =1/55
Return = 0.0182×100
Return=1.82%
Therefore the return on the stock will be 1.82%
On January 1, 2017, Boston Enterprises issues bonds that have a $1,850,000 par value, mature in 20 years, and pay 7% interest semiannually on June 30 and December 31. The bonds are sold at par. 1. How much interest will Boston pay (in cash) to the bondholders every six months
Answer:
Interest per six months =$64,750 .
Explanation:
Bonds are instruments used by companies, governments and other entries to borrow from the public.
They represent a contractual agreement where the borrower commits to pay a percentage of the principal amount borrowed plus the principal amount to the lender or investor.
The proportion of the amount borrowed which is paid as interest is called coupon. The interest payment is computed as the the coupon rate in percentage multiplied by the amount borrowed.
Interest payment = Coupon rate (%) × Nominal Value
Annual interest payment = 7% × 1,850,000 =$129,500
Semi-annual interest payment = Annual interest payment/2
Semi-annual interest payment =129,500 /2 =64,750 .
Interest per six months =$64,750 .
Note we had to divide by 2 because they are two six months in a year.
The interest income received from older Industrial revenue bonds may be taxable to the holder at regular income tax rates if the holder is:
Answer:
the "substantial user" of the facility built with the proceeds of the issue.
Explanation:
An Industrial revenue bond (IRB) can be defined as any municipal debt security issued by a local or state government agency with respect to a private firm which intend to undergo a particular project such as building facilities, purchasing heavy machinery or equipments.
The interest income received from older Industrial revenue bonds (IRB) may be taxable to the holder at regular income tax rates if the holder is the "substantial user" of the facility built with the proceeds of the issue because in the true sense it is only beneficial to the holder and not the larger community.
One significant way that blacks were able to enjoy economic independence was by settling in the West on federally provided public land.
a. True
b. False
Prior to setting pricing options for its products to maximize profit, a company must: a. determine whether it should use horizontal or vertical integration. b. select appropriate corporate-level strategies. c. perform value-chain functional activities.
Answer: b. select appropriate corporate-level strategies
Explanation:
Prior to setting pricing options for its products to maximize profit, a company must select appropriate corporate-level strategies.
This is necessary in order to ensure that the strategies aligns with what the organization is willing to do in order to achieve its profit maximization goal.
what happens to aggregate output if both taxes and government spending are lowered by $300 billion and mpc
Answer:
The answer is:
1. consumers' expenditure increases by $150 billion
2. output will decrease by $600 billion
Explanation:
Tax impact:
$300 billion x 0.5
= $150 billion.
If taxes are lowered by $300 billion, consumers' expenditure increases by $150 billion because with lower tax, there is money money to be spent because their disposable income has increased.
Government spending impact:
$300/(1-0.5)
$300/0.5
=$600 billion.
Due to government spending that has increased by this amount, output will decrease by this amount too because government has directly competed with firms that should have used this money to increase the total output.
Therefore, net effect on total output is $300billion($600 - $300)
Eccles Inc. Eccles Inc., a zero growth firm, has an expected EBIT of $100,000 and a corporate tax rate of 30%. Eccles uses $500,000 of 12.0% debt, and the cost of equity to an unlevered firm in the same risk class is 16.0%. Refer to the data for Eccles Inc. What is the firm's cost of equity according to MM with corporate taxes? a. 25.9% b. 32.0% c. 28.8% d. 21.0% e. 23.3%
Answer:
b) 32%
Explanation:
Formula for calculating cost of equity is given as ;
r levered = r levered + ( debt / equity × ( r unlevered - cost of debt) × ( 1 - tax)
r unlevered is the cost of an unlevered equity = 16.0%
Debt = $500,000
Cost of debt = 12%
Equity = unknown
Firstly, we need to calculate the value of the firm and the formula is denoted by;
EBIT ( 1 - tax ) / Unlevered cost of equity + ( debt × tax )
= $100,000 ( 1 - 30% ) / 16% + ( $500,000 × 30% )
= $100,000 ( 0.7 ) /0.16 + $30,000
= $437,500 + $150,000
= $587,500
r levered = 16% + ( $500,000 / ( $587,500 - $500,000 ) × ( 16% - 12% ) × ( 1 - 30%)
= 0.16 + ( $500,000 / 87,500 ) × 0.04 × ( 0.7 )
= 0.16 + 5.71 × 0.04 × 0.7
= 32%
Pfd Company has debt with a yield to maturity of , a cost of equity of , and a cost of preferred stock of . The market values of its debt, preferred stock, and equity are million, million, and million, respectively, and its tax rate is . What is this firm's after-tax WACC? Note: Assume that the firm will always be able to utilize its full interest tax shield.
Pfd Company has debt with a yield to maturity of 7.5%, a cost of equity of 13.5%, and a cost of preferred stock of 9.5%. The market values of its debt, preferred stock, and equity are $10.5 million, $3.5 million, and $24.5 million, respectively, and its tax rate is 40%. What is this firm's weighted average cost of capital (WACC)?
Answer:
10.68%
Explanation:
As we know that:
WACC = Ke * Ve / (Ve + Vpref + Vd (1-Tax))
+ Kd * Vd*(1-tax) / (Ve + Vpref + Vd*(1-Tax))
+ Kpref * Vpref / (Ve + Vpref + Vd (1-Tax))
Here
Ke is 13.5%
Pre tax Kd is 7.5%
Kpref is 9.5%
Ve is value of equity and is $24.5 million
Vpref is value of equity $3.5 million
Vd is $10.5 million
Tax rate is 40%
By putting the values, we have:
WACC = 13.5% *$24.5 / ($24.5m + $3.5m + $10.5m (1-40%))
+ 7.5% * (1-40%) * $45m / ($24.5m + $3.5m + $10.5m (1-40%))
+ 9.5% * $3.5m / ($24.5m + $3.5m + $10.5m (1-40%))
WACC = 0.045 * 0.273 + 0.095 * 0.091 + 0.135 * 0.636
= 10.68%
Reports that trace the entry of and changes to critical data values are called ____ and are essential in every system.
Answer:
audit trails
Explanation:
Reports that trace the entry of and changes to critical data values are called audit trails and are essential in every system.
Telecom Systems can issue debt yielding 7 percent. The company is in a 30 percent bracket. What is its aftertax cost of debt
Answer:
After tax cost of debt = 0.049 or 4.9%
Explanation:
The after tax cost of debt is the rate of debt after deducting the benefit from tax savings due to interest payments required by the debt which are deductible before calculating tax. The after tax cost of debt is somewhat an effective cost of debt. It is calculated using the following formula,
After tax cost of debt = Cost of debt * (1 - tax rate)
After tax cost of debt = 0.07 * (1 - 0.3)
After tax cost of debt = 0.049 or 4.9%
When the actual cost of direct materials used exceeds the standard cost, the company must have experienced an unfavorable direct materials price variance.
a. True
b. False
Answer:
True
Explanation:
The cost was bigger than they had budgeted for, so it was an unfavorable variance.
Muy Bueno Bakery sells three different products. Currently they are not able to meet all of their customers' demand. Using the following information, determine the price of the cake needed to meet the same contribution margin as the cookies. Cake Pie Cookies Contribution margin $18 $11 $3 Production hours 2 1.5 .25 Variable cost $12 $7 $1 Contribution margin/hr. $9 $7.33 $12 Current selling price $30 $18 $5 a.$45 b.$30 c.$42 d.$36
Answer:
d. $36
Explanation:
The Contribution margin is the net of selling price and variable cost of a product. It is calculated by deducting the variable cost from the selling price of a product.
Cake Pie Cookies
Current selling price $30 $18 $5
Variable cost $12 $7 $1
Contribution margin $18 $11 $3
Production hours 2 1.5 0.25
Contribution margin/hr. $9 $7.33 $12
Required Contribution margin per hour of cake = $12
Required Contribution margin = $12 x 2 = $24
Required Selling Price = Contribution margin + variable cost = $24 + $12 = $36
Note there is a mistake in the calculation of Contribution margin of Cookies as it is given $3 but after deducting the variable cost from selling price is should be $4 ( $5 - $1 ), I used the given contribution margin for the calculation.
On January 1, Year 2, Kincaid Company's Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $71,000 and $2,900, respectively. During the year Kincaid reported $190,000 of credit sales. Kincaid wrote off $1,750 of receivables as uncollectible in Year 2. Cash collections of receivables amounted to $227,700. Kincaid estimates that it will be unable to collect one percent (1%) of credit sales.
The net realizable value of receivables appearing on Kincaid's Year 2 balance sheet will amount to:
a) $29,650.
b) $28,500.
c) $33,300.
d) $31,550.
Answer:
b) $28,500.
Explanation:
The computation of the net realizable value of receivables is shown below:
As we know that
Net realizable value = Gross account receivable - allowance for doubtful debts
where,
Gross account receivable is
= Beginning balance of the account receivable + credit sales - written off amount - collections
= $71,000 + $190,000 - $1,750 - $227,700
= $31,550
And, the allowance for doubtful debts is
= Beginning balance of allowance for doubtful debts - written off + allowance needed
= $2,900 - $1,750 + $190,000 × 1%
= $3,050
So, the net realizable value is
= $31,550 - $3,050
= $28,500
hence, the correct option is b. $28,500
"The flexible budget formula is fixed costs $50,000 plus variable costs of $4 per direct labor hour. What is the total budgeted cost at (a) 9,000 hours and (b) 12,345 hours
Answer:
$86,000 and $99,380
Explanation:
The flexible budget formular is fixed at $50,000 plus variable costs
The direct labor hour is $4 per hour
The total budgeted cost at 9,000 hours can be calculated as follows
= $50,000 + ($4×9,000 hours)
= $50,000 + $36,000
= $86,000
The total budgeted cost at 12,345 hours can be calculated as follows
= $50,000 + ( $4×12,345 hours)
= $50,000 + $49,380
= $99,380
Hence the total budgeted cost at 9,000 hours and 12,345 hours is $86,000 and $99,380 respectively
Stock splits can be used to: C) increase the par value per share while decreasing the market price per share. A) adjust the market price of a stock so it falls within a preferred trading range B) decrease a company's excess cash thereby lowering agency costs. E) adjust the debt-equity ratio to its preferred level D) increase the total equity of a firm.
Answer:
A) adjust the market price of a stock so it falls within a preferred trading range
Explanation:
A stock split is when a company increases the number of its shares outstanding.
for example if a company has 6 million shares outstanding at a price of $10, earning per share is $1 and dividend per share is $2. this company announces a 2 for 1 split :
the number of outstanding shares becomes 2 x 6 million = 12 million
stock price becomes = $10 / 2 =$5
earning per share = $1 / 2 = $0.50
dividend per share = $2 / 2 = $1
After a stock split, the price of the shares falls. so it can be used to adjust the market price of a stock so it falls within a preferred trading range.
A stock split doesn't affect the balances in shareholders equity account.
Stock split doesn't affect the cash holdings of the firm.
Market capitalisation doesn't change after a split, so stock value doesn't change.
The infant industry argument says that Question 7 options: tariffs should be imposed to allow a new industry in a country to get established. imports should target new products from other countries to take advantage of the transmission of new ideas. dumping should be allowed in order to establish a presence of an industry that has previously not had a presence in another country. countries should produce and trade goods according to their comparative advantage.
Answer:
The infant industry argument says that Question 7 options:
tariffs should be imposed to allow a new industry in a country to get established.
Explanation:
The argument for the infant industry protectionism suggests that the imposition of tariffs on imports gives a new industry in the country the required breathing space it requires to develop, grow, and be established before it can face competitive forces from outside, which imports imply. Since newly formed industries often do not command the economies of scale and learning experience that their competitors from other countries may have, therefore, they need to be singularly shaded from external competition until they have achieved similar economies of scale and learning curve. But, can they attain any competitive edge without learning from competitors?
One of the problems with licensing as a method of achieving international business is that it is a much more difficult procedure to implement than the other methods.
a. True
b. False
Answer: False
Explanation:
Licensing involves a company giving another company in another country/market permission to produce its products or use its likeness. The company that gets the license will then pay the parent company specified amounts for being able to do so.
This method of international business is cheap as the company licensing will see its brand spread to other countries without actually having to worry about set-up costs in the other country which can be very high. It is therefore one of the easiest methods of expanding to international markets there is.
Keating Co. is considering disposing of equipment with a cost of $55,000 and accumulated depreciation of $38,500. Keating Co. can sell the equipment through a broker for $29,000, less a 5% broker commission. Alternatively, Gunner Co. has offered to lease the equipment for five years for a total of $45,000. Keating will incur repair, insurance, and property tax expenses estimated at $12,000 over the five-year period. At lease-end, the equipment is expected to have no residual value. The net differential income from the lease alternative is
Answer:
$9,250
Explanation:
Calculation for the net differential income from the lease alternative
Lease amount=$45,000
Estimated expenses=$12,000
Net sale of equipment=Sale of equipment through broker $25,000 less 5% commission
Using this formula
Net differential income = Lease amount - estimated expenses - Net sale of equipment
Let plug in the formula
Net differential income= $45,000-$12,000-($25,000-($25,000*5%)
Net differential income=$45,000-$12,000-($25,000-$1,250)
Net differential income=$45,000-$12,000-$23,750
Net differential income=$45,000-$35,750
Net differential income=$9,250
Therefore net differential income from the lease alternative is $9,250
Midhun uses internet to deposit 1 poin
and withdraw money from his
bank. Name this type of
banking.
e-commerce
O e-banking
O e-payment
O e-lending
Answer:
e banking
Explanation:
it is called e banking ( electronic), because Midhun is using both deposit and withdraw money through internet
You have been hired by the CFO of Lugones Industries to help estimate its cost of common equity. You have obtained the following data: (1) r d = yield on the firm's bonds = 7.00% and the risk premium over its own debt cost = 4.00%. (2) r RF = 5.00%, RP M = 6.00%, and b = 1.25. (3) D 1 = $1.20, P 0 = $35.00, and g = 8.00% (constant). You were asked to estimate the cost of common based on the three most commonly used methods and then to indicate the difference between the highest and lowest of these estimates. What is that difference?
Answer:
Under CAPM:
Re = Rf + Beta(Rm - Rf)
Rf = 5%
Rm - Rf = 6%
Beta = 1.25
Re = 5% + (1.25 x 6%) = 12.5%
Under dividend discount model:
Re = (Div₁ / P₀) + g
Div₁ = $1.20
P₀ = $35
g = 8%
Re = ($1.20 / $35) + 8% = 11.43%
Under bond yield plus risk premium approach:
Re = Pre-tax cost of debt + risk premium over its own debt
Pre-tax cost of debt = 7%
risk premium over its own debt = 4%
Re = 7% + 4% = 11%
The highest cost of equity results from the CAPM model and it is 12.5% while the lowest results from using the bond yield plus risk approach (11%), the difference is 1.5% between them.
2. Suppose that you have 2 buyers and one item for sale. The first buyer values your product at $10, and the second buyer values your product at $6. You estimate that the probability of getting the high value customer is 40%. Your marginal costs are $3. You have only one chance to sell your item to these buyers. What is your optimal price and expected profit
Answer:
Price at $6, Profit = $3
Explanation:
When price is $ 10:
Profit = $10 - $3 = $7
But there is 40% chance of high valued customer
So, profit = $7 X 0.40 = $2.8
When price is $6
Profit = $6 - $3 = $3
Crane Corporation has 2,000 shares of stock outstanding. It redeems 500 shares for $370,000 when it has paid-in capital of $300,000 and E & P of $1,200,000. The redemption qualifies for sale or exchange treatment for the shareholder. Crane incurred $13,000 of accounting and legal fees in connection with the redemption transaction and $18,500 of interest expense on debt incurred to finance the redemption. What is the effect of the distribution on Crane Corporation's E & P? Also, what is the proper tax treatment of the redemption expenditures?
Answer:
E&P $1,200,000 × 25%= $300,000 reduction
Crane Corporation would reduce its E & P in the amount of $300,000 as a result of the redemption.
This represents a 25% decrease in the amount of the E & P corresponding to the 25% stock redemption.
When a stock redemption results in sale or exchange treatment for the shareholder, the E & P account of a corporation is reduced in an amount not in excess of the ratable share of the E & P of the distributing corporation attributable to the stock redeemed.
As such, none of the expense of $13,000 of accounting and legal fees or other is deductible.
Akram owns a small farm. He employs 80 workers in the field and has recently hired a manager to help him manage the farm. The income of the business varies greatly during the year. The farm makes a small profit but Akram is ambitious. He wants to take over a neighbour’s farm and increase the range of crops he sells. He thinks that he needs long-term finance and plans to take out bank loan to pay for the takeover. He has already borrowed money to buy a new tractor. A friend has advised him to form a company and sell shares
Question Completion:
Requirement. Identity two types of short-term finance Akram could use when the farm income is low
Answer:
Akram's Farm
Akram's farm can make good use of the following short-term financing sources:
1. Akram's farm can use Accounts Payable to provide short-term trade finance when the farm buys farm inputs, equipment, and other supplies on credit. The farm's Accounts Payable can provide interest-free trade loans by allowing the farm to take longer time to settle the suppliers. But, the farm should not miss out on cash discounts - an important source of trade finance.
2. Akram's farm can generate finances by ensuring early collections of the Accounts Receivable. Akram's farm can also go ahead and borrow on the accounts receivable through short-term bank loans guaranteed on the accounts. The farm can also factor the accounts receivable by selling them to factoring and finance houses for less.
Explanation:
Akram's farm is still a small farm that is not yet formed as a company. The immediate concentration is growing the entity and starting the processes for changing its corporate status so that it can take advantage of the sources of finance available to companies.
At the beginning of the year, Custom Mfg. established its predetermined overhead rate by using the following cost predictions: overhead costs, $840,000, and direct materials costs, $400,000. At year-end, the company’s records show that actual overhead costs for the year are $1,041,000. Actual direct materials cost had been assigned to jobs as follows.Jobs completed and sold $390,000 Jobs in finished goods inventory 83,000 Jobs in work in process inventory 55,000 Total actual direct materials cost $528,000Required:a. Determine the predetermined overhead rate.b. Write the overhead costs incurred and the amounts applied to jobs during the year using the predetermined overhead rate and determine whether overhead is overapplied or underapplied.c. Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold.
Answer:
a. Determine the predetermined overhead rate.
the predetermined overhead rate = total budgeted overheard costs / total budgeted direct materials used = $840,000 / $400,000 = 2.1 = 210%
b. Write the overhead costs incurred and the amounts applied to jobs during the year using the predetermined overhead rate and determine whether overhead is overapplied or underapplied.
applied overhead costs = actual direct materials x overhead rate = $528,000 x 210% = $1,108,800
over applied overhead = actual overhead - standard overhead = $1,041,000 - $1,108,800 = -$67,800 favorable variance
c. Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold.
Dr Manufacturing overhead 67,800
Cr Cost of goods sold 67,800
Explanation:
budget:
overhead costs, $840,000
direct materials costs, $400,000
actual:
overhead costs, $1,041,000
direct materials costs, $528,000
A stock has had the following year-end prices and dividends: Year Price Dividend 1 $ 43.37 - 2 48.35 $ .60 3 57.27 .63 4 45.35 .80 5 52.27 .85 6 61.35 .93 What are the arithmetic and geometric average returns for the stock? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
geometric mean return = 1.2%
arithmetic mean return = 1.21%
Explanation:
Year Price Dividend Yearly return
1 $43.37 - 0
2 $48.35 $0.60 1.24%
3 $57.27 $0.63 1.1%
4 $45.35 $0.80 1.76%
5 $52.27 $0.85 1.63%
6 $61.35 $0.93 1.52%
geometric mean return = [(1 + 0) x (1 + 0.0124) x (1 + 0.011) x (1 + 0.0176) x (1 + 0.0163) x (1 + 0.0152)]¹/⁶ - 1 = 1.012 - 1 = 0.012 = 1.2%
arithmetic mean return = (0% + 1.24% + 1.1% + 1.76% + 1.63% + 1.52%) / 6 = 7.25% / 6 = 1.21%
A company purchased an asset for $3,200,000 that will be used in a 3-year project. The asset is in the 3-year MACRS class. The depreciation percentage each year is 33.33 percent, 44.45 percent, and 14.81 percent, respectively. What is the book value of the equipment at the end of the project
Answer:
$237,120
Explanation:
year depreciation % depreciation expense book value
1 33.33% $1,066,560 $2,133,440
2 44.45% $1,422,400 $711,040
3 14.81% $473,920 $237,120
the book value at the end of the project's life = $237,120, which is equivalent to 7.41% (the fourth year according to MACRS depreciation)
project that has an expected return of 25% and a standard deviation of 30%. What is the project's coefficient of variation
Answer: 1.2
Explanation:
The Coefficient of Variation tells the accuracy of the mean. If it is high then there is a large dispersion around the mean. A smaller figure indicates that the mean is more accurate/ precise.
Coefficient of Variation = Standard Deviation / Expected Return
Coefficient of Variation = 30%/25%
Coefficient of Variation = 1.2
A company stocks an SKU with a weekly demand of 600 units and a lead time of 4 weeks. There are 52 weeks in a year. Management will tolerate 1 stock out per year. If sigma for the lead time is 100 and the order quantity is 2500 units, what is:
A company stocks an SKU with a weekly demand of 600 units and a lead time of 4 weeks. There are 52 weeks in a year. Management will tolerate 1 stock out per year. If sigma for the lead time is 100 and the order quantity is 2500 units, what is: the safety stock, the average inventory, and the order point?
Answer:
The safety stock = 142 units
The average inventory = 1392 units
The order point = 2542 units
Explanation:
Given that:
the weekly demand = 600 units
lead time = 4 weeks
sigma for the lead time (i.e the standard deviation [tex]\sigma[/tex] ) = 100 units
Order quantity = 2500 units
The objective is to calculate :
the safety stock, the average inventory, and the order point?
To start with the number of order per year.
The number of order per year = Annual demand/Order quantity
The number of order per year = (Weekly demand × 52)/ Order quantity
The number of order per year = (600 × 52)/2500
The number of order per year = 31200/2500
The number of order per year = 12.48 times /year
Also, the service level for the safety factor = (Number of order per year - 1)/ number of order per year
the service level for the safety factor = ( 12.48 - 1)/12.48
the service level for the safety factor = 11.48/12.48
the service level for the safety factor = 0.9199
the service level for the safety factor = 91.99%
∴ the safety factor at 91.99% service level = (safety factor at (90% +94%))÷2
the safety factor at 91.99% service level = (1.28 +1.56) ÷2
the safety factor at 91.99% service level = 2.84 ÷2
the safety factor at 91.99% service level = 1.42
Now,
the safety stock = 100 × safety factor at 91.99% service level
the safety stock = 100 × 1.42
the safety stock = 142 units
The order point = safety factor + demand during lead time
where;
The demand during lead time = weekly demand × 4
The demand during lead time = 600 × 4
The demand during lead time = 2400 units
The order point = safety factor + demand during lead time
The order point = 142 + 2400
The order point = 2542 units
Finally,
The average inventory = (order quantity ÷ 2) + safety stock
The average inventory = (2500 ÷ 2) + 142
The average inventory =1250 +142
The average inventory = 1392 units
When U.S. goods become more expensive relative to foreign goods, exports will __________ and imports will __________.
Answer:
fall, rise
Explanation:
US goods will become less expensive
TB MC Qu. 6-101 Data concerning Bedwell Enterprises ... Data concerning Bedwell Enterprises Corporation's single product appear below: Selling price per unit $ 160.00 Variable expense per unit $ 91.50 Fixed expense per month $ 429,490 The unit sales to attain the company's monthly target profit of $19,000 is closest to: (Do not round intermediate calculations.) Brewer 8e Rechecks 2018-06-19
Answer:
Break-even point in units= 6,547 units
Explanation:
Giving the following information:
Selling price per unit $160
Variable expense per unit $91.50
Fixed expense per month $429,490
Desired profit= $19,000
To calculate the number of units to be sold, we need to use the break-even point formula:
Break-even point in units= (fixed costs + desired profit) / contribution margin per unit
Break-even point in units= (429,490 + 19,000) / (160 - 91.5)
Break-even point in units= 6,547 units
The_______hypothesis postulates that top managers typicalljy overstate their ability to create value from acquisition primarily because rising to the top of a corporation has given then an exaggerated sense of the own capabilities.
a. recognition.
b. optimistic.
c. hybrid.
d. hubris.
Answer:
Option D
Hubris hypothesis
Explanation:
The hubris hypothesis attempts to explain the effect of overconfidence at a managerial level, and how it affects business practices negatively. It can lead to several actions like rash decisions, expensive company acquisitions, and buy-outs e.t.c.
In summary, it tries to explain the effect of pride on clear reasoning and progress at a managerial level in companies.
Therefore, it fits perfectly into the sentence in the question above, as the question is explaining the effect of pride on the performance of newly promoted managers.
Option D is the correct answer
