Here are data on two companies. The T-bill rate is 4.6% and the market risk premium is 8.9%.

Company $1 Discount Store Everything $5
Forecast return 15 % 14 %
Standard deviation of returns 22 % 24 %
Beta 1.4 1.0

Required:
What would be the fair return for each company, according to the capital asset pricing model (CAPM)?

Analyzing and computing accrued warranty liability and expense waymire company sells a motor that carries a 60-day unconditional warranty against product failure. from prior years' experience, waymire estimates that 2% of units sold each period will require repair at an average cost of $100 per unit. during the current period, waymire sold 69,000 units and repaired 1,000 units. (a) how much warranty expense must waymire report in its current period income statement? (b) what warranty liability related to current period sales will waymire report on its current period-end balance sheet? (hint: remember that some units were repaired in the current period.) (c) what analysis issues must we consider with respect to reported warranty liabilities?