Bernard Companies Stock Has an Expected Return of 9

question 22

Multiple Choice

Bernard Companies stock has an expected return of 9.5 percent.The stock is expected to return 11 percent in a normal economy and 13.4 percent in a boom.The probabilities of a recession, normal economy, and a boom are 10 percent, 84 percent, and 6 percent, respectively.What is the expected return if the economy is in a recession?

• A)-5.44 percent
• B)-2.97 percent
• C)--2.46 percent
• D)-10.98 percent
• E)-6.98 percent

Distinguish between ordinary and necessary business expenses.

Calculate the adjusted basis for depreciation and cost recovery of business assets.

Identify the tax treatment of specific business expenses and their deductibility.

Comprehend the definition and tax implications of listed property.