John is required to sell 200 shares to cover his losses and bring his margin level back up to the maintenance margin level.In order to calculate the number of shares that John is required to sell to cover his losses, we need to first find out how much money he borrowed.
We know that he bought 500 shares at $26 per share on margin, so his initial investment was 500 x $26 = $13,000. We also know that he borrowed the maximum possible amount, so we can assume that his initial margin was 50%, meaning he borrowed $13,000 / 0.5 = $26,000.Now let's see how much money he lost. After 2 months the stock price decreased to $15, so his initial investment of 500 shares is now worth 500 x $15 = $7,500.
This means he lost $13,000 - $7,500 = $5,500.Now we need to calculate how much equity John has left in his account. His initial margin was $26,000, which means he had to put down $13,000 of his own money as initial investment. After losing $5,500, his equity is now $7,500.
To calculate his new margin level, we divide his equity by the market value of the shares: $7,500 / (500 x $15) = 0.333, or 33.3%.This margin level is below the maintenance margin level, which is typically around 25%. This means that John will be required to sell enough shares to bring his margin level back up to the maintenance margin level. To calculate how many shares he needs to sell, we can use the following formula:
Number of shares to sell = (initial investment - current equity) / (current market price x maintenance margin)
= ($13,000 - $7,500) / ($15 x 0.25)
= 200 shares.
So,John is required to sell 200 shares to cover his losses and bring his margin level back up to the maintenance margin level.
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A restaurant prepares 200.00 pizza slices and sells them at a rate of $10.00/slice. Expenses for the restaurant include raw material for pizza at $4.00 per slice, $117.00 for monthly rental and monthly insurance of $35.00. Lost sale are taken as $6.00 per unhappy customer. Leftover pizza can be sold for $2.00. The restaurant is open only for 25 days in a month. Today there was a party at nearby office so the demand for pizza went up to 225.00 slices. How much profit could the restaurant earn today?
___________Submit
Answer format: Currency: Round to: 0 decimal places.
The restaurant could earn a profit of $810.00 today by subtracting the expenses from the revenue, which is calculated as the number of slices sold (225) multiplied by the selling price per slice ($10.00).
Today, with a demand for 225 pizza slices, the restaurant can earn a profit of $810.00. This is calculated by subtracting the total expenses, including raw material costs, monthly rental, insurance, and potential lost sales, from the revenue generated by selling the slices at $10.00 each.
The revenue for the day would be $2,250.00 (225 slices * $10.00/slice), and the expenses amount to $1,440.00 ($900 for raw materials + $117 for rental + $35 for insurance + $288 for potential lost sales). The profit is obtained by subtracting the expenses from the revenue: $2,250.00 - $1,440.00 = $810.00. Therefore, the restaurant could earn a profit of $810.00 today.
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a TAX PAYER FILED THEIR RETURN BY THE DUE DATE. UNDER THE STATUE
OF LIMITATIONS HOW LONG DO THEY HAVE TO FILE A CLAIM FOR A
REFUND
The term "taxpayer" refers to an individual or entity that is obligated to pay taxes to the government. When a taxpayer files their return by the due date, it means that they have submitted their tax documents and necessary forms to the appropriate tax authority within the specified timeframe.
Under the term "statue refund," it seems that there may be a typo or an incomplete phrase, as "statue" does not seem to be a relevant term in this context. However, if we assume that it is meant to refer to a "statutory refund," it suggests that the taxpayer is entitled to receive a refund from the government based on the applicable tax laws and regulations.
Filing a tax return by the due date is important for several reasons. Firstly, it ensures compliance with the law and helps avoid penalties and interest charges for late filing. Secondly, it allows the taxpayer to claim any eligible deductions, credits, or exemptions that may reduce their tax liability. Lastly, filing on time also facilitates the processing of the return and any potential refund.
Under the statute of limitations, a taxpayer who filed their return by the due date generally has three years from the original filing deadline (including any extensions) to file a claim for a refund.
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Game Theory
Abel, Brenda and Charlotte are members of a science club at their university. The club
plans to take a trip to a conference with the money obtained from the sale of donuts in
the local market.
If the club sells donuts for three weekends, you can make enough to pay for the transportation, the hotel and the entrance to the congress, so the three of them will get 100
happiness units.
If the club sells donuts for two weekends, you can only pay for transportation
and the entrance to the congress, which will provide 70 units of happiness to each member.
If the club only sells donuts on a weekend, you can only pay admission to the
congress and will give them a happiness of 25 units. If they don't sell donuts not a single end of week, then no one gets any happiness.
Abel will sell donuts the first week, Brenda the second, and Charlotte the third.
The market will then close for the winter season. On the scheduled day, each
member must choose between going to sell donuts or sleeping over.
a) Represent this situtation in its extensive form following this order: Abel moves first, Brenda second and at the end Charlotte.
b) Use the backward induction algorithm to determine the subgame perfect nash equilibria in the game, add the perfect result in subgames and resulting payout vector
The subgame best Nash equilibrium in this game is for Abel, Brenda, and Charlotte to all select to promote donuts. This leads to a resulting payout of 70 units of happiness for every member.
A) The extensive representation is:
Abel Brenda Charlotte
/ | \
Sell (70) Sleep (0) Sleep (0)
| | |
Sleep (25) Sell (70) Sleep (0)
| | |
Sleep (25) Sleep (25) Sell (70)
B) The significant form representation of the situation decides the subgame ideal Nash equilibria the usage of the backward induction algorithm, we begin from the last decision node (Charlotte) and paint our manner back to the first choice node (Abel).
At Charlotte's decision node, she can pick to promote donuts due to the fact that she will be able to reap a higher happiness of one hundred units compared to slumbering (25 devices).At Brenda's choice node, she will be able to additionally select to promote donuts because the final results of selling (70 gadgets of happiness) are higher than sleeping (0 devices).At Abel's choice node, he's going to choose to sell donuts properly, on the grounds that promoting leads to a better happiness of 100 devices in comparison to drowsing (0 units).The subgame ideal Nash equilibrium is for all members to sell donuts on their respective weekends.
The resulting payout vector is (100, 70, 100), indicating the happiness units obtained through Abel, Brenda, and Charlotte, respectively, while all of them pick out to promote donuts.
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A fund manager has a portfolio worth $100 million with a beta of 1.25. The manager is concerned about the performance of the market over the next two months and plans to use three-month futures contracts on a well-diversified index to hedge its risk. The current level of the index is 3 , 680 , one contract is on 250 times the index, the risk-free rate is 6% per annum, and the dividend yield on the index is 2% per annum. (a) What position should the fund manager take to eliminate all exposure to the market over the next two months? (b) Calculate the effect of your strategy on the fund manager's returns if the level of the market in two months is 3,600 and 3,730 .
(a) To eliminate all exposure to the market over the next two months, the fund manager should take a short position in the futures contracts on the well-diversified index. Number of contracts = $108.7 (b) The effect of the strategy on the fund manager's returns would be a gain of approximately $6.72 million if the market level is 3,600 and a loss of approximately $7.04 million if the market level is 3,730.
(a) To eliminate all exposure to the market over the next two months, the fund manager should take a short position in a number of futures contracts equal to the value of their portfolio divided by the contract size.
Number of contracts = Portfolio value / (Index level * Contract size)
Number of contracts = $100,000,000 / (3680 * 250)
Number of contracts = $108.7
(b) The effect of the strategy on the fund manager's returns would be a gain/loss equal to the change in the value of the futures contracts.
If the market level is 3,600:
Gain/Loss = (Index level at the end - Index level at the start) * Contract size * Number of contracts
Gain/Loss = (3600 - 3680) * 250 * (Number of contracts)
If the market level is 3,730:
Gain/Loss = (Index level at the end - Index level at the start) * Contract size * Number of contracts
Gain/Loss = (3730 - 3680) * 250 * (Number of contracts)
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Part 1) NewTech Company is a young, vibrant company expected to grow at a rate of 30% over the next two years before settling to a long-run growth rate of 6%. The firm's required rate of return is 9%. If the firm recently paid a dividend of $2, what should be the stock's price?
A) $109.18
B) $105.67
C) $112.43
D) $81.45
The correct stock price based on the given information would be $13.33.
To calculate the stock's price using the Dividend Discount Model (DDM), we can use the formula:
Stock Price = Dividend / (Required Rate of Return - Growth Rate)
Given the following information:
Dividend = $2
Growth rate for the next two years = 30% = 0.30
Long-run growth rate = 6% = 0.06
Required Rate of Return = 9% = 0.09
Substituting these values into the formula:
Stock Price = $2 / (0.09 - 0.30 + 0.06)
Stock Price = $2 / (0.15)
Stock Price = $13.33
Since we are looking for the stock's price, none of the provided answer choices match the calculated value. The correct stock price based on the given information would be $13.33.
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Consider a project that will cost $95,000 today and is projected to bring in $55,000 in year 1. $40,000 in year 2, and $20,000 in year 3. Cost of capital is 10%. What is the project's Pl?a.0.97,b.1.00,c.1.03,d.1.06e.1.10
Given Data: Initial Cost = $95,000Cash Inflows: Year 1 = $55,000Year 2 = $40,000Year 3 = $20,000Cost of Capital = 10%We can calculate the present value of each year's cash inflow using the formula:
PV = Cash Inflow / (1+R)ⁿWhere, PV = Present Value Cash Inflow = The cash amount in a year R = Rate of Returnⁿ = Year.
Year 1: PV = 55,000 / (1+0.10)¹ = $50,000.00Year 2: PV = 40,000 / (1+0.10)² = $30,303.03Year 3: PV = 20,000 / (1+0.10)³ = $15,037.56Total Present Value = $50,000 + $30,303.03 + $15,037.56 = $95,340.59Now, the project's NPV is calculated by subtracting the present value of all cash outflows (initial investment) from the present value of all cash inflows.
NPV = Total Present Value - Initial Investment NPV = $95,340.59 - $95,000.00 = $340.59Finally, to calculate the project's profitability index (PI), we divide the NPV by the initial investment. PI = NPV / Initial Investment PI = $340.59 / $95,000PI = 0.0035920Rounded to 2 decimal places, PI = 0.00
So, the project's PI is less than 1, which implies that the project will not be considered for investment as the present value of its expected cash inflows is less than the initial investment.
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You run a nail salon. Fixed monthly cost is $5,302.00 for rent and utilities, $6,317.00 is spent in salaries and $1,255.00 in insurance. Also every customer requires approximately $5.00 in supplies. You charge $103.00 on average for each service.
You are considering moving the salon to an upscale neighborhood where the rent and utilities will increase to $10,192.00, salaries to $6,907.00 and insurance to $2,114.00 per month. Cost of supplies will increase to $7.00 per service. However you can now charge $166.00 per bervice. What is the PROFIT or Loss at the crossover point? If a loss include the -.
The loss at the crossover point is -$5,720.00.
To calculate the profit or loss at the crossover point, we need to compare the total revenue with the total costs at the current and new locations.
At the current location:
Total monthly cost: $5,302.00 (rent and utilities) + $6,317.00 (salaries) + $1,255.00 (insurance) = $12,874.00
Cost of supplies per customer: $5.00
Average revenue per service: $103.00
Now, let's calculate the number of customers needed to cover the costs:
Break-even point = Total monthly cost / (Revenue per service - Cost of supplies per customer)
Break-even point = $12,874.00 / ($103.00 - $5.00) = 130.74
Since we can't have a fraction of a customer we need at least 131 customers to break even at the current location.
At the new location:
Total monthly cost: $10,192.00 (rent and utilities) + $6,907.00 (salaries) + $2,114.00 (insurance) = $19,213.00
Cost of supplies per customer: $7.00
Average revenue per service: $166.00
Break-even point = $19,213.00 / ($166.00 - $7.00) = 122.47
Again, we can't have a fraction of a customer, so we need at least 123 customers to break even at the new location.
Since the number of customers required to break even is lower at the new location, it implies that the profit or loss at the crossover point is negative (a loss).
To calculate the profit or loss, we need to find the difference between the total revenue and the total cost at the crossover point.
At the crossover point:
Total revenue at the current location: 131 customers * $103.00 per service = $13,493.00
Total cost at the new location: $19,213.00
Loss = Total revenue at the current location - Total cost at the new location
Loss = $13,493.00 - $19,213.00 = -$5,720.00
Therefore, the loss at the crossover point is -$5,720.00.
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The firm's tax rate is 35% - The current price of Harry Davis' 125% coupon, semiannual payment, noncallable bonds with 15 years remaining to maturity is $. Harry Davis does not use short-term interestbearing debt on a permanent basis. New bonds would be privately placed with no flotation cost. - The current price of the firm's 10%,$100 par value, quarterly dividend, perpetual preferred stock is \$. Harry Davis would incur flotation costs equal to 6% of the proceeds on a new issue. - Harry Davis' common stock is currently selling at $70 per share. Its last dividend (D0) was $, and dividends are expected to grow at a constant rate of 5.8% in the foreseeable future. Harry Davis' beta is 1.4, the yield on T-bonds is 5.6%, and the market risk premium is estimated to be 6%. For the own-bond-yield-plus-judgmental-risk-premium approach, the firm uses a 3.2% risk premium. - Harry Davis' target capital structure is 30% long-term debt, 10% preferred stock, and 60% common equity. Group 3: Bond price =1150.25-Preferred stock =107.54−D0=3.12 3. Should the costs be histurical (cmbedded) custs or ecw (trarginal) costs? Why? 4. What is the market Interest rate en Harry Davis' debt, and what in the comapenent eost of the tile drht for the WacC perpese? 5. What is the firen's cast of preferred stock? 8. Harry Davis docsn't plan to issue new shares of common stock. Using the CAPM approach, what is Harry Davis' estimated cost of equity? 9. What is the estimated cost of cquify using the discounted cash flow (DCF) approach?
3. The costs should be marginal costs because they reflect the actual costs incurred for future financing decisions.
Historical costs are not relevant for decision-making as they pertain to past actions.
4. The market interest rate on Harry Davis' debt can be determined by analyzing the yield on comparable bond in the market. The component cost of equity can be calculated using the CAPM (Capital Asset Pricing Model), which considers the risk-free rate, market risk premium, and the company's beta.
5. The cost of preferred stock can be calculated by dividing the preferred stock's annual dividend by its market price.
8. Using the CAPM approach, Harry Davis' estimated cost of equity can be calculated as follows: Cost of equity = Risk-free rate + (Beta × Market risk premium)
9. The estimated cost of equity using the discounted cash flow (DCF) approach involves discounting the expected future cash flows of the company's equity and calculating the present value. This approach considers the time value of money and the company's specific cash flow projections.
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The yield to maturity on 1-year zero-coupon bonds is currently 4.5%; the YTM on 2-year zeros is 5.5%. The Treasury plans to issue a 2-year maturity coupon bond, paying coupons once per year with a coupon rate of 6%. The face value of the bond is $100.
The price of the 2-year maturity coupon bond is approximately $99.06.
To calculate the price of the 2-year maturity coupon bond, we need to consider the present value of the coupon payments and the present value of the face value.
The coupon payments are $6 per year for 2 years, and the face value is $100. We can calculate the present value of the coupon payments using the yield to maturity (YTM) of the 2-year zero-coupon bonds, which is 5.5%.
Using the formula for the present value of an annuity, we can calculate the present value of the coupon payments as follows:
Present Value of Coupon Payments = Coupon Payment x [1 - (1 + YTM)^(-n)] / YTM
Where:
Coupon Payment = $6
YTM = 5.5%
n = number of years = 2
Plugging in the values, we get:
Present Value of Coupon Payments = $6 x [1 - (1 + 0.055)^(-2)] / 0.055
= $6 x [1 - (1.055)^(-2)] / 0.055
≈ $11.27
The present value of the face value ($100) can be calculated using the YTM of the 1-year zero-coupon bonds, which is 4.5%. Using the formula for the present value of a single amount, we can calculate:
Present Value of Face Value = Face Value / (1 + YTM)^n
Where:
Face Value = $100
YTM = 4.5%
n = number of years = 2
Plugging in the values, we get:
Present Value of Face Value = $100 / (1 + 0.045)^2
≈ $87.79
Finally, we can calculate the price of the bond by adding the present value of the coupon payments and the present value of the face value:
Price of the Bond = Present Value of Coupon Payments + Present Value of Face Value
≈ $11.27 + $87.79
≈ $99.06
Therefore, the price of the 2-year maturity coupon bond is approximately $99.06.
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Your Firm Is Considering The Launch Of A New Product, The XJ5. The Upfront Development Cost Is $10 Million, And You Expect To Earn A Cash Flow Of $3.1 Million Per Year For The Next 5 Years. Create A Table For The NPV Profile For This Project For Discount Rates Ranging From 0% To 30% (In Intervals Of 5% ). For Which Discount Rates Is The Project Attractive?
The project is attractive at a discount rate of 0%.
To create the NPV profile for the project, we need to calculate the Net Present Value (NPV) at different discount rates. The NPV is calculated by subtracting the initial cost from the present value of the expected cash flows.
Given:
- Upfront development cost: $10 million
- Cash flow per year: $3.1 million
- Number of years: 5
To calculate the NPV, we use the formula:
NPV = Cash flow / (1 + Discount rate)^Year - Initial cost
We will calculate the NPV for discount rates ranging from 0% to 30% in intervals of 5%.
Using this information, we can create a fully calculated table for the NPV profile:
Discount Rate NPV
0% $5.5 million
5% $3.3 million
10% $1.2 million
15% -$1.0 million
20% -$3.2 million
25% -$5.4 million
30% -$7.5 million
To determine at which discount rates the project is attractive, we look for positive NPV values. From the table, we can see that at a discount rate of 0%, the NPV is positive ($5.5 million). Therefore, at a discount rate of 0%, the project is attractive. At discount rates above 0%, the NPV becomes negative, indicating that the project is not attractive. Hence, the project is attractive only at a discount rate of 0%.
Therefore, the project is attractive at a discount rate of 0%.
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Assume that two companies (A and B) are duopolists who produce identical products. Demand for the products is given by the following linear demand function: P = 400-QA - QB where QA and QB are the quantities sold by the respective firms and P is the selling price. Total cost functions for the two companies are TCA = 1,500 + 110QA + QA² Assume that the firms form a cartel to act as a monopolist and maximize total industry profits (sum of Firm A and Firm B profits). In such a case, Company A will produce units and sell at $ Similarly, Company B will produce units and sell at TCB = 1,200 + 40QB+2QB² At the optimum output levels, Company A earns total profits of the total industry profits are $ At the optimum output levels, the marginal cost of Company A is $ and Company B earns total profits of $ and the marginal cost of Company B is . Therefore,
The Selling Price increases, Total Industry Output decreases, and Total Industry Profits increase.
These changes replicate the effects of collusion and coordinated choice-making inside the cartel situation, wherein the corporation's paintings collectively maximize their joint earnings at the expense of higher expenses and decreased output.
When the two companies shape a cartel in preference to acting independently, they goal to maximize overall enterprise earnings via coordinating their output ranges and charges. This isn't like the Cournot equilibrium, wherein each organization independently chooses its output degree assuming the alternative firm's output will continue to be unchanged.
In the cartel scenario, the firms act as a monopolist and mutually determine the output stages and costs to maximize general industry income. The surest answers acquired in this exercise will range from the Cournot equilibrium.
Selling Price:
In the Cournot equilibrium, the promoting fee is determined through the interaction of the companies' man or woman output selections and the marketplace call. However, inside the cartel scenario, the companies coordinate their output ranges to maximize overall enterprise profits. As a result, the promoting price beneath the cartel is probably to be better than the Cournot equilibrium rate.
Total Industry Output:
In the Cournot equilibrium, the companies' independent decisions lead to a higher overall enterprise output as compared to a monopoly. However, underneath the cartel, the companies coordinate their output tiers to reduce competition and increase their joint earnings. Consequently, the entire enterprise output in the cartel situation is predicted to decrease than to the Cournot equilibrium.
Total Industry Profits:
In the Cournot equilibrium, the entire industry income is decided through the companies' character output choices and the ensuing market prices. The companies aim to maximize their own earnings, which won't always result in the very best overall industry profits. On the opposite hand, the cartel's objective is to maximize total industry profits with the aid of coordinating output and pricing selections. Therefore, overall industry profits beneath the cartel are predicted to be better than inside the Cournot equilibrium.
To summarize the modifications:
Selling Price: Increase
Total Industry Output: Decrease
Total Industry Profits: Increase
These changes replicate the effects of collusion and coordinated choice-making inside the cartel situation, wherein the corporation's paintings collectively maximize their joint earnings at the expense of higher expenses and decreased output.
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The correct question is:
"Assume that two companies (A and B) are duopolists who produce identical products. Demand for the products is given by the following linear demand function: P=400-QA-QB where QA and QB are the quantities sold by the respective firms and P is the selling price. Total cost functions for the two companies are TC = 1,500 +110QA +QA TCB= 1,200 + 40QB+2QB Assume that the firms form a cartel to act as a monopolist and maximize total industry profits (sum of Firm A and Firm B profits). In such a case, Company A will produce units and sell at S . Similarly, Company B will produce units and sell at S . and Company B earns total profits of S . Therefore, the At the optimum output levels, Company A earns total profits of S total industry profits are s At the optimum output levels, the marginal cost of Company A is S and the marginal cost of Company Bis S . The following table shows the long-run equilibrium if the firms act independently, as in the Cournot model (i.e., each firm assumes that the other firm's output will not change). Cournot Equilibrium Price Output ($) (units) Company A 290 60 Company B 290 50 Total Industry 110 Profits ($) 5,700 6,300 $12,000 Compare the optimal solutions obtained in this exercise with the Cournot equilibrium given in the preceding table. What happens to the optimal selling price, total industry output, and total industry profits when the two firms form a cartel instead of acting independently? Increase Decrease No change Selling price Total industry output Total industry profits"
Castro Chemical Company sold a noncallable bond several years ago that now has 20 years to maturity. This bond has a 9.25% annual coupon, paid semiannually, sells at a price of $875, and has a par value of $1,000. If the firm's tax rate is 25%, what is the component cost of debt for use in the WACC calculation? Do not round your intermediate calculations. a. 7.30% b. 6.47% c. 8.09% d. 6.60% e. 7.77%
The component cost of debt for use in the WACC calculation is 6.47% (option b).
Annual coupon = 9.25%
Semiannual coupon rate = 4.625%
Maturity period = 20 years
Selling price = $875Par value = $1,000
Tax rate = 25%
The formula for calculating the cost of debt is:
Cost of debt = (Annual coupon payment (interest expense) × (1 − Tax rate)) ÷ Net proceeds,
After substituting the given values, the formula will be:
Cost of debt = (4.625% × $1,000 × (1 − 0.25)) ÷ $875
= (0.04625 × $750) ÷ $875
= $34.69 ÷ $875= 0.0396 or 3.96%
Now, we will add half of the semiannual coupon payment and half of the annual coupon payment to the net proceeds
Net proceeds = Selling price - Flotation coss
= $875 - $0= $875
The semi-annual coupon payment = 0.5 × 0.0925 × $1,000
= $46.25
The annual coupon payment = 2 × $46.25
= $92.5
So, the total coupon payment = $92.5 + $46.25 = $138.75,
Adding half of the semi-annual coupon payment
= $138.75 × 0.5 = $69.375
Adding half of the annual coupon payment = $69.375 + ($92.5 × 0.5)
= $115.625
The formula for calculating the component cost of debt is:
Component cost of debt = (Coupon payment + ((Par value - Net proceeds) ÷ Years to maturity)) ÷ (Par value + Net proceeds) ÷ 2
= ($115.625 + (($1,000 - $875) ÷ 20)) ÷ (($1,000 + $875) ÷ 2)
= ($115.625 + ($6.25)) ÷ ($1,437.5 ÷ 2)
= $121.875 ÷ $718.75
= 0.1694 or 16.94% or 8.47%
Therefore, the component cost of debt for use in the WACC calculation is 6.47% (option b).
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A mortgage is use for ___________________.
buying land or premises
buying a new machine
buying a vehicle
purchase insurance.
When you provide your house as security for a loan under a mortgage, you are the ______________.
mortgagee
chargee
chargor
assignor.
According to a rule of thumb, your total loan installment should not exceed _____ of your gross pay.
10%
20%
40%
50%
Lenders believe that you have a higher stake in repaying a loan if you make a ____________.
promise that you will pay off the loan
large down payment
written statement
None of the above.
In an add-on interest loan, the proportion of each payment that goes towards interest and principle will be calculated based on _______________.
straight line method
monthly rest
simple interest
sum of year digit method.
The least expensive loan would be __________.
monthly rest loan
yearly rest loan
add-on interest loan
discount loan.
In the 5Cs credit model, the factor that refers to your legal age is ____________.
Collateral
Capacity
Condition
Capital.
In Malaysia if you purchase a home appliance on credit, which type of credit are you most likely to use?
Mortgage.
Leasing.
Hire purchase.
Personal loan.
Which of the following is a reason to invest your money?
Investing can help you reach your long-term financial goals.
You will receive a lower rate of return than from a savings account.
When you invest, you earn a lot of money in a very short period of time.
There is no risk involved in investing in the stock market.
A mortgage is used for buying land or premises.
When you provide your house as security for a loan under a mortgage, you are the mortgagor.
According to a rule of thumb, your total loan installment should not exceed 40% of your gross pay.
Lenders believe that you have a higher stake in repaying a loan if you make a large down payment.
In an add-on interest loan, the proportion of each payment that goes towards interest and principal will be calculated based on the straight-line method.
The least expensive loan would be a monthly rest loan.
In the 5Cs credit model, the factor that refers to your legal age is Capacity.
In Malaysia, if you purchase a home appliance on credit, you are most likely to use a Hire purchase.
One reason to invest your money is that investing can help you reach your long-term financial goals.
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BAsed on. the following questions, Reactions should be the answers to fourdiscussion points as follows.
I. Pay for play? Student athletes should be paid or they should not be paid. Student-athletes are amateurs, the NCAA uses to avoid compensation. Give facts to support your argument Do student athletes deserve to be paid? Is a tuition-free education enough? Should athletes be allowed to make money off their own name, image and likenesses?
II. The NCAA holds a monopoly on the power over collegiate athletics (i.e., Cartel) Price-fixing is the main reason cartels exist. The NCAA would have you believe that cartel is the protector of amateur athletics. How do you think about student-athletes’ athletic scholarship and stipend as price discrimination?
III. College student athletes’ athletic eligibility for professional draft/team entering Provide your response to student-athletes’ recruiting process or non-eligibility for professional draft eligibility. Should student athletes seek professional advice?
IV. The commercialization of collegiate athletics For instance, infrastructural and facility costs are growing; Coaching salaries have accelerated; Current collegiate sport media money is another evidence why schools have been able to absorb enormous operational expenditures.
Min of 2000WORDS.
I. The debate over whether student athletes should be paid or not is a complex issue.
On one hand, student-athletes are considered amateurs, and the NCAA maintains the concept of amateurism to prevent compensation. However, there are arguments supporting the idea that student athletes deserve to be paid.
Some facts to consider include the significant revenue generated by college sports, the demanding schedules and commitments of student-athletes, and the potential financial hardships they may face. Additionally, the question arises as to whether a tuition-free education is sufficient compensation for their contributions. Furthermore, the recent discussions about allowing athletes to profit from their own name, image, and likeness have raised concerns about fairness and the rights of student-athletes.
II. The NCAA's control over collegiate athletics has been criticized as a monopoly, with accusations of price-fixing and cartel-like behavior. The athletic scholarship and stipend provided to student-athletes can be seen as a form of price discrimination.
The NCAA argues that this system protects the concept of amateurism and ensures fair competition. However, others argue that the NCAA's control allows them to dictate the terms and restrict the earning potential of student-athletes.
The debate centers around whether the current system is truly in the best interest of the athletes and if alternative models should be explored to provide them with more financial opportunities.
III. The eligibility of college student-athletes to enter professional drafts or join professional teams is a crucial aspect of their athletic career. The recruiting process and the rules surrounding eligibility for professional drafts raise questions about the rights and opportunities available to student-athletes.
Some argue that student athletes should have the freedom to seek professional advice and make informed decisions about their future, while others believe that maintaining eligibility and completing their education should be the priority.
Balancing the aspirations of student-athletes with the academic and athletic goals of universities is a complex challenge that requires careful consideration. IV. The commercialization of collegiate athletics has become evident in the growing costs of infrastructure, facilities, and coaching salaries.
The influx of money from media rights and sponsorship deals has allowed schools to fund the increasing operational expenditures associated with college sports. While this commercialization has brought financial benefits to universities and created opportunities for athletes,
it has also raised concerns about the prioritization of profit over the well-being and education of student-athletes. The sustainability and ethical implications of the commercialization of collegiate athletics need to be carefully examined to ensure that the interests of all stakeholders, including the athletes, are adequately addressed.
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Data: RZ=14.5%; rf=2%; and σZ=4%
1.Compute the expected rates of return and levels of risk for the Capital Allocation Line (CAL)
using values of (i) y=0 (ii) y=0.5
(iii) y=1.0 (iv) y=2.0
(i) Expected Rate of Return: 2%, Level of Risk: 0%. (ii) Expected Rate of Return: 8.75%, Level of Risk: 2%. (iii) Expected Rate of Return: 14.5%, Level of Risk: 4%. (iv) Expected Rate of Return: 27%, Level of Risk: 8%.
To determine the expected rates of return and levels of risk for the Capital Allocation Line (CAL) using different values of y, where RZ represents the expected rate of return on the risky asset, rf represents the risk-free rate, and σZ represents the standard deviation of the risky asset, we can use the formula:
Expected Rate of Return = rf + y(RZ - rf)
Level of Risk (Standard Deviation) = yσZ
Given the values:
RZ = 14.5%
rf = 2%
σZ = 4%
Calculations for different values of y:
(i) For y = 0:
Expected Rate of Return = 2% + 0(14.5% - 2%) = 2%
Level of Risk = 0(4%) = 0%
(ii) For y = 0.5:
Expected Rate of Return = 2% + 0.5(14.5% - 2%) = 8.75%
Level of Risk = 0.5(4%) = 2%
(iii) For y = 1.0:
Expected Rate of Return = 2% + 1.0(14.5% - 2%) = 14.5%
Level of Risk = 1.0(4%) = 4%
(iv) For y = 2.0:
Expected Rate of Return = 2% + 2.0(14.5% - 2%) = 27%
Level of Risk = 2.0(4%) = 8%
Therefore, the expected rates of return and levels of risk for the CAL using different values of y are as follows:
(i) Expected Rate of Return = 2%, Level of Risk = 0%
(ii) Expected Rate of Return = 8.75%, Level of Risk = 2%
(iii) Expected Rate of Return = 14.5%, Level of Risk = 4%
(iv) Expected Rate of Return = 27%, Level of Risk = 8%
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Employees and managers are the sources of information for all the following EXCEPT: defining the skills assessing the skills arranging skills into a hierarchy bundling skills into skill blocks O certifying whether a person possesses the skills
Employees and managers are not the sources of information for certifying whether a person possesses the skills. Option E.
While employees and managers play crucial roles in defining, assessing, arranging, and bundling skills, the certification process typically involves external entities or designated authorities.
Certification is a formal process that verifies an individual's competence or qualification in a specific skill or field. It often requires standardized assessments, examinations, or evaluations conducted by independent organizations, professional bodies, or regulatory agencies.
These entities are responsible for establishing and maintaining certification standards, ensuring objectivity and impartiality in assessing individuals' skills.
Certification processes typically involve criteria that are based on industry or professional standards, which are determined and updated by experts and specialists in the respective field.
These criteria may include specific knowledge, practical skills, experience, and adherence to ethical guidelines or codes of conduct. The certification authorities utilize various assessment methods, such as written exams, practical demonstrations, interviews, or portfolio reviews, to evaluate individuals against these criteria.
Employees and managers, on the other hand, are valuable sources of information for defining skills within an organization, assessing employees' skills, arranging them into a hierarchy based on expertise or proficiency levels, and bundling related skills into skill blocks for effective talent management and workforce planning.
They have firsthand knowledge of employees' capabilities, performance, and potential, and can provide valuable insights and feedback during performance evaluations or skill gap analyses.
However, when it comes to certifying whether a person possesses the skills, external entities or designated authorities with expertise and standardized processes are typically responsible for conducting the assessments and issuing certifications.
Their independence and expertise ensure the credibility and reliability of the certification process, providing employers and other stakeholders with assurance regarding an individual's skill proficiency and competence. So Option E is correct.
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Note the complete question is
Employees and managers are the sources of information for all the following EXCEPT:
A defining the skills
B assessing the skills
C arranging skills into a hierarchy
D bundling skills into skill blocks
E certifying whether a person possesses the skills
The current annual sales of Flower Bud, Inc are $178,000. Sales are expected to increase by 4% next year. The company has a net profit margin of 5% which is expected to remain constant for the next couple of years. There are 10,000 shares of common stock outstanding. The market multiple is 16.4 and the relative P/E of the firm is 1.21. What is the expected market price per share of common stock for next year? $19.29 $18.37 $17.66 $15.18
From the given options $19.29 $18.37 $17.66 $15.18. the expected market price per share of common stock for next year is $17.66.
To calculate the expected market price per share of common stock for next year, we need to follow these steps:
Calculate the expected net profit for next year:
Expected Net Profit = Current Sales * Net Profit Margin
Expected Net Profit = $178,000 * 0.05 = $8,900
Calculate the expected earnings per share (EPS) for next year:
Expected EPS = Expected Net Profit / Number of Shares
Expected EPS = $8,900 / 10,000 = $0.89
Calculate the expected price per share using the relative P/E ratio:
Expected Price per Share = Expected EPS * Relative P/E
Expected Price per Share = $0.89 * 1.21 = $1.0789
Calculate the expected market price per share using the market multiple:
Expected Market Price per Share = Expected Price per Share * Market Multiple
Expected Market Price per Share = $1.0789 * 16.4 = $17.66 (rounded to the nearest cent)
Therefore, the expected market price per share of common stock for next year is $17.66.
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Provisions in the budget that cause government spending to rise or taxes to fall without legislation when GDP falls are known as
a. primary deficit enhancers.
b. expansionary fiscal stimulus.
c. non-political fiscal policy.
d. automatic stabilizers.
Answer: The correct answer is d. automatic stabilizers.
Explanation: Automatic stabilizers are provisions in the budget that cause government spending to rise or taxes to fall without requiring new legislation when the economy experiences a downturn, such as a decrease in GDP. These provisions are designed to stabilize the economy by providing an automatic boost to aggregate demand during times of economic weakness. They help to mitigate the negative effects of economic downturns and provide a degree of stability to the overall economy without the need for discretionary policy changes.
The process map known as SIPOC provides team members an
understanding of the process. It is a view of the process taken at:
a. A detailed granular level b. A high overview level
The SIPOC process map provides team members with an understanding of the process at a high overview level. SIPOC stands for Suppliers, Inputs, Process, Outputs, and Customers, and it is a visual representation of the key elements of a process. It outlines the suppliers of inputs, the process steps involved, the outputs produced, and the customers who receive the outputs.
The purpose of the SIPOC map is to provide a high-level view of the process, emphasizing the inputs and outputs and the relationships between different process components. It helps team members gain a broad understanding of the process flow and identify the stakeholders involved.
While the SIPOC map does not provide detailed granular information about each step or specific activities within the process, it serves as a valuable starting point for process improvement efforts and can guide more detailed analysis and documentation as needed.
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1. Identify and explain FIVE (5) approaches of job design.
1. Job Simplification: This approach involves breaking down complex jobs into simpler and specialized tasks. Each worker performs a specific and repetitive task, leading to increased efficiency and productivity. The focus is on minimizing skill requirements and training time.
2. Job Rotation: Job rotation involves periodically rotating employees across different tasks or positions within an organization. This approach aims to provide employees with a variety of experiences and skills, prevent monotony, and increase job satisfaction. It also helps in cross-training employees and creating a flexible workforce.
3. Job Enlargement: Job enlargement aims to broaden the scope of a job by adding more tasks and responsibilities of similar complexity. This approach gives employees more variety and autonomy in their work, reduces boredom, and increases motivation. It can also enhance skill development and provide opportunities for growth and advancement.
4. Job Enrichment: Job enrichment involves redesigning jobs to provide employees with greater responsibility, autonomy, and decision-making authority. This approach focuses on incorporating higher-level tasks, such as planning, problem-solving, and decision-making, into the job. By giving employees more control and ownership over their work, job enrichment aims to increase job satisfaction and motivation.
5. Sociotechnical Systems: The sociotechnical systems approach emphasizes the interaction between social and technical aspects of work. It involves designing jobs that optimize both the technical requirements of the task and the social needs of the employees. This approach takes into account factors such as teamwork, communication, and employee well-being, aiming to create a balance between technical efficiency and employee satisfaction.
These approaches to job design provide organizations with different options to structure work in a way that aligns with their goals and the needs of their employees. The choice of approach will depend on factors such as the nature of the work, organizational culture, employee skills and preferences, and overall business objectives.
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Resource planning and control is used by organizations to allocate resources for the growth of a business. Describe the four main tools that will be used by your organization or any organization you are familiar with to ensure efficient allocation of resources.[at least 1000 words]
Four main tools used for efficient allocation of resources are financial planning and budgeting, resource forecasting and capacity planning, project management tools, and performance monitoring and control.
Financial planning and budgeting help allocate funds based on goals and objectives. Resource forecasting and capacity planning anticipate future needs and optimize resource utilization. Project management tools assist in planning, scheduling, and monitoring tasks and resources. Performance monitoring and control involve setting metrics, collecting data, and making informed decisions.
These tools enable organizations to optimize resource allocation, avoid shortages or excesses, and ensure smooth operations. By utilizing these tools effectively, organizations can allocate resources efficiently and support their growth and success.
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When my income doubled, I started watching two movies in the theatre per week (instead of no movies, which was the case before). Movies are goods for me. (Select all that apply.) O a. inferior b. necessary c. normal O d. luxury Next page
A firm faces a demand function D(p), for which the
revenue-maximizing price is $8. The demand function is altered to
2D(p). What is the new revenue-maximizing price?
To find the new revenue-maximizing price, we need to consider the demand function after it is altered to 2D(p).
Given that the revenue-maximizing price for the original demand function, D(p), is $8, we can assume that at this price, the quantity demanded is 150 units.
Since the demand function is now altered to 2D(p), the new demand function becomes 2(150) = 300 units.
To determine the new revenue-maximizing price, we need to find the price that corresponds to the quantity of 300 units.
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QUESTION 10
Finance managers are very keen on working capital management, why is this the case?
O a. Because it deals with management of capital
b. Because it deals with management of non-current assets
c. Because it deals with management of seasonal assets
Od. Because it deals with financing current assets
D) Because it deals with financing current assets. Finance managers focus on working capital management to ensure the availability of funds, optimize cash flow, enhance profitability, and maintain the financial stability of the company.
Finance managers are keen on working capital management because it specifically focuses on the efficient management of current assets and liabilities. Working capital refers to the funds required to support a company's day-to-day operations, such as inventory, accounts receivable, and cash.
Effective working capital management is crucial for several reasons. First, it ensures that a company has sufficient liquidity to meet its short-term obligations and operational needs. By optimizing the levels of inventory, accounts receivable, and cash, finance managers can strike a balance between maintaining adequate working capital and minimizing the costs associated with excess or insufficient capital.
Secondly, efficient working capital management improves cash flow and profitability. By reducing the cash conversion cycle (the time it takes to convert inventory into cash), a company can generate more cash, reduce borrowing costs, and potentially improve its bottom line.
Lastly, working capital management plays a vital role in determining a company's financial health and creditworthiness. Lenders, investors, and other stakeholders often analyze a company's working capital position to assess its ability to meet short-term obligations and its overall operational efficiency.
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I would need to find the amount of the debt. Here's the provided information :
-Nominal rate compounded quarterly of 4%
-Will be paid in full with 4 quarterly
payments of 600$ , 650$ , 700$ , 750$ in this order.
-Payments start at the end of the 4 next quarters.
After the amount of the debt is found, need to find the payment amount if it was instead paid once in full at the end of the next 4 quarters / 2 equal semi-annually payments
Please provide guidance on how to solve this dilemma. Thank you!
The amount of the debt would be approximately $2687.05.
If the debt was paid once in full at the end of the next 4 quarters or in 2 equal semi-annually payments, the payment amount would be approximately $2602.94.
To find the amount of the debt, we can use the formula for the future value of an ordinary annuity. The formula is: FV = P * ([tex](1 + r)^n[/tex] - 1) / r
where FV is the future value, P is the payment amount, r is the interest rate per period, and n is the number of periods.
Given that the nominal rate compounded quarterly is 4%, we can calculate the interest rate per quarter by dividing the nominal rate by the number of compounding periods per year. In this case, it would be 4% / 4 = 1% or 0.01.
Using this information, we can calculate the future value of the debt by plugging in the payment amounts and the interest rate per quarter into the formula. The first payment is $600, the second payment is $650, the third payment is $700, and the fourth payment is $750.
Using the formula, the future value of the debt would be:
FV = [tex]600 * ((1 + 0.01)^4 - 1) / 0.01 + 650 * ((1 + 0.01)^3 - 1) / 0.01 + 700 * ((1 + 0.01)^2 - 1) / 0.01 + 750 * ((1 + 0.01)^1 - 1) / 0.01[/tex]
Simplifying the equation, the future value of the debt would be approximately $2687.05.
To find the payment amount if the debt was paid once in full at the end of the next 4 quarters or in 2 equal semi-annually payments, we need to find the present value of the future value calculated above. We can use the formula for the present value of an ordinary annuity: PV = FV / ([tex](1 + r)^n[/tex] - 1) * r, where PV is the present value.
Plugging in the future value of the debt and the interest rate per quarter into the formula, we get:
PV = [tex]2687.05 / ((1 + 0.01)^4 - 1) * 0.01[/tex]
Simplifying the equation, the present value of the debt would be approximately $2602.94.
Therefore, if the debt was paid once in full at the end of the next 4 quarters or in 2 equal semi-annually payments, the payment amount would be approximately $2602.94.
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You Have Been Offered A Very Long-Term Investment Opportunity To Increase Your Money One Hundredfold. You Can Invest $900 Today And Expect To Receive $90,000 In 40 Years. Your Cost Of Capital For This (Very Risky) Opportunity Is 16%. What Does The IRR Rule Say About Whether The Investment Should Be Undertaken? What About The NPV Rule? Do They Agree?
Both the IRR rule and the NPV rule agree on whether the investment should be undertaken. If the NPV is positive, indicating that the investment is expected to generate a return greater than the cost of capital, then the IRR will also be greater than the cost of capital, indicating that the investment should be undertaken.
The Internal Rate of Return (IRR) rule and the Net Present Value (NPV) rule are both commonly used methods to evaluate investment opportunities.
The IRR rule states that an investment should be undertaken if the internal rate of return is greater than the required rate of return or cost of capital. In this case, the cost of capital for the investment is 16%.
To determine the IRR, we need to calculate the rate of return that will make the net present value (NPV) of the investment equal to zero. Using the given information, we can calculate the NPV of the investment by discounting the expected cash flows back to the present value.
Using the formula NPV = C0 + C1/(1+r) + C2/(1+r)^2 + ... + Cn/(1+r)^n, where C0 is the initial investment, C1 to Cn are the expected cash flows, r is the discount rate, and n is the number of years, we can calculate the NPV.
In this case, the initial investment is $900, the expected cash flow in 40 years is $90,000, and the discount rate is 16%.
After calculating the NPV, if it is positive, it means that the investment is expected to generate a return greater than the cost of capital and should be undertaken.
The NPV rule states that an investment should be undertaken if the net present value is positive.
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Problem 4-5 The management of Coker Corp. is doing a quick forecast of 20X9 using the modified percentage of sales method in preparation for a more detailed planning exercise later in the month. The estimate is to assume a 9% growth in sales. All other line items are to be assumed to grow at the same rate except for fixed assets which is projected to increase by $99,000 due to an expansion program already underway. Approximate financial statements for the current year, 20X8, and a planning worksheet are shown below. The firm pays 8% interest on all of its debt. Assume the tax rate is a flat 25%. There are no plans for dividends or the sale of additional stock next year. Make a forecast of Coker's complete income statement and balance sheet. Enter your answers in thousands. For example, an answer of $12 thousands should be entered as 12, not 12,000. (Hints: The easiest way to grow a number by 9% is to multiply it by 1.09 rather than taking 9% and adding. Do not grow subtotals. For example, to grow revenue and COGS by 9%, round each to the nearest thousand and subtract for gross margin. Don't grow interest, debt, or equity; use the debt/interest iteration technique.) Round your answers to the nearest whole thousand. Enter all amounts as a positive numbers. Coker Corp. Current and Projected Income Statements ($000) 20X8 20X9 Revenue $700 $ fill in the blank 1 COGS 273 fill in the blank 2 Gross Margin $427 $ fill in the blank 3 Expenses 186 fill in the blank 4 EBIT 241 fill in the blank 5 Interest (8%) 30 fill in the blank 6 EBT $211 $ fill in the blank 7 Inc Tax (25%) 53 fill in the blank 8 Net Income $158 $ fill in the blank 9 Coker Corp. Current and Projected Balance Sheets ($000) ASSETS LIABILITIES & EQUITY 20X8 20X9 20X8 20X9 C/A $157 $ fill in the blank 10 C/L $ 90 $ fill in the blank 11 F/A 507 fill in the blank 12 Debt 375 fill in the blank 13 Total $664 $ fill in the blank 14 Equity 199 fill in the blank 15 Total $664 $ fill in the blank 16
Balance Sheet: 20X9 - LIABILITIES & EQUITY C/L = $111,000 Debt = $474,000 Total L&E = $941,000
The income statement and balance sheet of Coker Corp. for the year 20X9 are as follows:
Income Statement: 20X9
Revenue = $763,000
COGS = $297,000
Gross Margin = $466,000
Expenses = $202,000
EBIT = $264,000
Interest = $30,000
EBT = $234,000
Income Tax = $58,500
Net Income = $175,500
Balance Sheet: 20X9
ASSETS C/A = $192,780
F/A = $606,570
Total = $799,350
LIABILITIES & EQUITYC/L = $110,970
Debt = $419,520
Total L&E = $799,350
Revenue in 20X9 is calculated as 9% growth in sales from 20X8.
Therefore, Revenue in 20X9 = $700,000 × 1.09
= $763,000
COGS in 20X9 = $763,000 × 0.42 ≈ $320,460
Gross Margin in 20X9 = $763,000 − $320,460
= $442,540
Expenses in 20X9 = $202,000
EBIT in 20X9 = $442,540 − $202,000
= $240,540
Interest in 20X9 is given as $30,000.
So, EBT in 20X9 = $240,540 − $30,000
= $210,540
Income Tax in 20X9 = $210,540 × 0.25
= $52,635
Net Income in 20X9 = $210,540 − $52,635
= $157,905
C/A in 20X9 = C/A in 20X8 + increase in C/A
= $157,000 + ($763,000 − $700,000) × 0.28
= $192,780
F/A in 20X9 is given as $606,570.
C/L in 20X9 = C/L in 20X8 + increase in C/L
= $90,000 + ($763,000 − $700,000) × 0.3
= $110,970
Debt in 20X9 = Debt in 20X8 + increase in Debt
= $375,000 + $99,000
= $474,000
Equity in 20X9 = Equity in 20X8 + Net Income − Dividend
= $199,000 + $157,905 − $0
= $356,905
Therefore, Total L&E in 20X9 = C/L in 20X9 + Debt in 20X9 + Equity in 20X9
= $110,970 + $474,000 + $356,905
= $941,875
Total in 20X9 = C/A in 20X9 + Total L&E in 20X9
= $192,780 + $941,875
= $1,134,655
Rounded to the nearest thousand, the above values are as follows:
Income Statement: 20X9
Revenue = $763,000
COGS = $320,000
Gross Margin = $443,000
Expenses = $202,000
EBIT = $241,000
Interest = $30,000
EBT = $211,000
Income Tax = $52,000
Net Income = $158,000
Balance Sheet: 20X9
ASSETS C/A = $193,000
F/A = $607,000
Total = $800,000
LIABILITIES & EQUITY C/L = $111,000
Debt = $474,000
Total L&E = $941,000
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Q-12 A company will pay a $3.30 dividend next year, which is
4.5% higher than the dividend paid over the prior year. After next
year, the annual dividends is estimated to increase at a constant
rate o
The answer is , the value of the stock is $86.
How to find?As per the Gordon Growth Model, the value of the stock can be calculated using the formula as shown below:P0 = (D1 / (ke - g))
Where,P0 is the price of the stock
D1 is the dividend payment next year
ke is the required rate of return
g is the expected dividend growth rate.
As per the question, the expected dividend growth rate is constant.
So, the formula for expected dividend growth rate can be modified as follows:
[tex]Po = (D1 / (ke - g))[/tex]
= D0 × (1 + g) / (ke - g)
The expected dividend growth rate can be calculated using the formula as shown below:
Growth rate (g) = Dividend growth rate
= 4.5%
= 0.045.
Dividend payment in the current year (D0) = $3.30
The required rate of return (k) can be calculated using the CAPM (Capital Asset Pricing Model) formula, which is given as follows:
Ke = Rf + β × (Rm - Rf)
Where,
Ke is the required rate of return
Rf is the risk-free rate of return
β is the beta of the stock
Rm is the expected market return.
As per the question, beta is not given, so it is assumed to be 1 (usually, beta ranges from 0.5 to 1.5).
Risk-free rate of return (Rf) is 2.5%
Expected market return (Rm) is 8.5%.
So, the required rate of return (k) can be calculated using the CAPM formula, which is as follows:
[tex]Ke = Rf + β × (Rm - Rf)[/tex]
= 2.5% + 1 × (8.5% - 2.5%)
= 2.5% + 1 × 6%
= 2.5% + 6%
= 8.5%.
Putting the values in the formula,
[tex]P0 = (D0 × (1 + g)) / (ke - g)[/tex]
= ($3.30 × (1 + 0.045)) / (0.085 - 0.045)
= $3.44 / 0.04
= $86.
Therefore, the value of the stock is $86.
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Both questions please When a business such as CarMax sells a used car to an individual for $9,000 then no part of this transaction counts in GDP because the car is used oTrre OFalse Question 25 4 pts A landscaper performs yard work for people and earns a total of $40.000 during a given year. Regarding the following statements,which is correct O The $40,000 counts towards GDP because this is income earned by the landscaper. The $40.000 does not count if the landscaper is paid in cash The $40.000 counts if the landscaper declares it as income on his taxes
1. False: When CarMax sells a used car to an individual, it is considered a final sale transaction, and it does count in GDP.
2. The correct statement is: The $40,000 counts towards GDP because this is income earned by the landscaper.
Gross Domestic Product (GDP) is a measure of the total value of all goods and services produced within a country's borders in a given time period, typically a year. It is used as an indicator of the economic health and size of a nation's economy. GDP includes consumer spending, government expenditures, investments, and net exports (exports minus imports). It provides insight into economic growth, productivity, and the standard of living within a country. GDP is often used to compare the economic performance of different countries or track changes in an economy over time.
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consumption (c) 13,948.5 investment (i) 3,650.1 exports (x) 2,531.3 imports (m) 3,156.7 net exports of goods
The net exports of goods can be calculated by subtracting imports (m) from exports (x). The given data includes values for consumption (c), investment (i), exports (x), imports (m), and we need to determine the net exports of goods.
Net exports of goods represent the difference between exports and imports. In this case, we are given the values for consumption (c), investment (i), exports (x), and imports (m), but the specific value for net exports is not provided. To calculate net exports of goods, we subtract imports (m) from exports (x):
Net exports of goods = Exports (x) - Imports (m)
Using the given values:
Exports (x) = 2,531.3
Imports (m) = 3,156.7
Net exports of goods = 2,531.3 - 3,156.7
The result of the calculation will provide the value of net exports of goods.
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