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Asset Return Liabilities Return Asset A 10000 x Liability A 1000 8% Asset B 2000 6% Equity A 2000 4% Equity B 9000 12% Calculate
Asset | Return | Liabilities | Return | ||
Asset A | 10000 | x | Liability A | 1000 | 8% |
Asset B | 2000 | 6% | Equity A | 2000 | 4% |
Equity B | 9000 | 12% |
Calculate return on asset A as the weighted average of the return on the other financial instruments.
What is the weight attached to asset B
Asset | Return | Liabilities and Equity | Return | ||
Asset A | 10000 | 15% | Liability A | 1000 | 8% |
Asset B | 2000 | 6% | Liability B | -2500 | x |
Equity A | 13500 | 13% |
Calculate return on Liability B as the weighted average of the returns on the other financial instraments.
What is the weight attached to asset A?
Is liability B really a liability? Explain.
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