Ebay, which never owns the various items it sells, can be considered a online auction house.
eBay is an American multinational e-commerce company headquartered in San Jose, California, that provides consumer-to-consumer and business-to-consumer sales services via the internet. eBay was established in 1995 by Pierre Omidyar.
With over 185 million active buyers and a presence in 190 markets, the site is a platform for trading new and used goods on the internet.An auction house is a company that facilitates the buying and selling of goods or services, usually through auctions.
An auction is a procedure for selling and purchasing goods or services by offering them up for bid and then selling them to the highest bidder. In an auction, the highest bidder is the one who gets to buy the goods or services. It is a popular sales method for high-value items like art, antique furniture, and rare collectibles, as well as for real estate, industrial machinery, and other big-ticket items.
For more such questions auction,Click on
https://brainly.com/question/30587813
#SPJ8
1. A firm has a debt-to-equity ratio of .5. Its after-tax cost of debt is 12%. Its overall cost of capital is 14%. What is its cost of equity?
2. Stock A has an expected return of 20% and stock B has an expected return of 4%. However, the risk of stock A as measured by its variance is 3 times that of stock B. If the two stocks are combined equally into a portfolio of the two stocks, what would be the portfolio’s expected return?
The required answer is the -
1. the cost of equity for the firm is 8%.
2. the portfolio's expected return is 12%.
1. To find the cost of equity for a firm, use the formula:
Cost of Equity = Overall Cost of Capital - (Debt-to-Equity Ratio * After-Tax Cost of Debt)
In this case, the debt-to-equity ratio is 0.5 and the after-tax cost of debt is 12%.
The overall cost of capital is 14%. Plugging these values into the formula,
Cost of Equity = 14% - (0.5 * 12%) = 14% - 6% = 8%
Therefore, the cost of equity for the firm is 8%.
2. To find the portfolio's expected return, to take the weighted average of the expected returns of each stock. Since the two stocks are combined equally, each stock will have a weight of 0.5.
Portfolio's Expected Return = (Weight of Stock A * Expected Return of Stock A) + (Weight of Stock B * Expected Return of Stock B)
In this case, the expected return of Stock A is 20% and the expected return of Stock B is 4%. Plugging these values into the formula,
Portfolio's Expected Return = (0.5 * 20%) + (0.5 * 4%) = 10% + 2% = 12%
Therefore, the portfolio's expected return is 12%.
To know about average. To click the link.
https://brainly.com/question/27646993.
#SPJ11
In the year 2018, Country XYZ has risen as the second most populous country in the world that has indicated growth improvement over time. Suppose consumption function for India is C=250 +0.6(Y−T) and taxes T=10+0.3Y. Mean, during a closed economy, India has recorded investment at $300 million and government outlays at $200 million. a) Calculate India's national income equilibrium. (4 marks) b) Supposed in year 2019, Country XYZ's investment increase by $100 million and government outlays reduced by 25% compared to previous year. Calculate the new national income equilibrium. (3 marks) c) In the following 2020, Country XYZ has been involved in export and import activities. This sector has contributed $100 for net export (NX). All other economic information is similar to 2019. Calculate national income equilibrium for the 4-sectors economy of Country XYZ. (3 marks) Section C (Total 10 marks) Answer only ONE question Question 7 (10 marks) The covid-19 pandemic has caused huge unexpected economic turbulence. The government and Bank Negara (central bank) had to hold emergency meetings in deciding the future direction of the country. Discuss the possible macroeconomics concerns, policies, and their expected impact on the country. What are the tools utilised by the government and Bank Negara to the economic turbulence can be curb? Question 8 (10 marks) During the financial crisis of 1998, Malaysia experienced a continuous current account surplus. Although Malaysia's export has increased tremendously, the majority of economist is sceptical about the sustainability of pegging the exchange rate to the US dollar. They believed Ringgit Malaysia is undervalued, thus, attracting many importers to import Malaysian production. However, this has triggered many challenges for the Malaysian government and Bank Negara. Analyse the possible challenges, and discuss if this situation is pro-long.
A. a. The national income equilibrium is $1,770.61 million. (Rounded off to two decimal places).
b. The new national income equilibrium is $1,881.64 million. (Rounded off to two decimal places).
c. The national income equilibrium for the 4-sectors economy of Country XYZ is $2,142.86 million. (Rounded off to two decimal places).
B. Step-by-step explanation:a) Calculation of National Income Equilibrium:
Given the consumption function as C = 250 + 0.6(Y - T), and taxes T = 10 + 0.3Y
Mean,
Investment (I) = $300 million
Government Outlays (G) = $200 million
Let, the national income equilibrium be Y.
Substituting T and I in the national income accounting equation;
Y = C + I + G
Here, C = 250 + 0.6(Y - 10 - 0.3Y) + I + G= 250 + 0.6Y - 6 - 0.18Y + 300 + 200= 0.42Y + 744 million
Thus, the national income equilibrium is $1,770.61 million. (Rounded off to two decimal places).
b) Calculation of New National Income Equilibrium:
In 2019, Suppose the investment increase by $100 million and government outlays reduced by 25%.
Therefore,
Investment (I) = $400 million ($300 + $100 million)
Government Outlays (G) = $150 million (25% of $200 million)
Let, the new national income equilibrium be Y'.
Substituting T and I in the national income accounting equation;Y' = C + I + G
Here, C = 250 + 0.6(Y' - 10 - 0.3Y') + 400 + 150= 0.42Y' + 790 million
Thus, the new national income equilibrium is $1,881.64 million. (Rounded off to two decimal places).
c) Calculation of National Income Equilibrium:
In 2020,
Net Export (NX) = $100 million
Investment (I) = $400 million
Government Outlays (G) = $150 million
Let, the new national income equilibrium be Y".
Substituting T, I, and NX in the national income accounting equation;
Y" = C + I + G + NX
Here, C = 250 + 0.6(Y" - 10 - 0.3Y") + 400 + 150 + 100= 0.42Y" + 900 million
Thus, the national income equilibrium for the 4-sectors economy of Country XYZ is $2,142.86 million. (Rounded off to two decimal places).
Section CThe Covid-19 pandemic has led to significant economic turbulence. Possible macroeconomic concerns include a decrease in aggregate demand due to lower consumer confidence, increased unemployment, supply chain disruptions, reduced foreign investment, and falling commodity prices.To tackle these issues, the government and central bank can utilize expansionary fiscal and monetary policies. The government can increase government spending, cut taxes, provide cash transfers, and offer loan guarantees to help businesses remain afloat. The central bank can lower interest rates and inject liquidity into the economy through open market operations and quantitative easing. In addition, the government can implement structural reforms to increase economic competitiveness, promote trade, and diversify the economy. The central bank can also monitor financial stability and provide support to the banking sector, if necessary. Ultimately, the effectiveness of these policies will depend on the severity of the economic downturn and the level of policy coordination.
To learn more about National Income Equilibrium : https://brainly.com/question/33400874
#SPJ11
Two problems with the average price level indicated by the CPI are changes in both the O mix of goods purchased; prices of goods purchased mix of goods purchased; quality of goods purchased quality of goods purchased; quantity of goods produced O prices of goods purchased; quantity of goods produced
CPI problems: changes in goods mix purchased and quality not considered, leading to potential overestimation of average price level.
The two problems with the average price level indicated by the Consumer Price Index (CPI) are:
1. Changes in the mix of goods purchased: The CPI measures changes in the average price level over time by tracking a fixed basket of goods and services. However, consumer preferences and spending patterns may change over time, leading to shifts in the mix of goods purchased. If consumers start purchasing more of the goods that have experienced relatively higher price increases, the CPI may overstate the true average price level because it does not adequately account for changes in the composition of the basket.
2. Quality of goods purchased: The CPI measures price changes without explicitly considering changes in the quality of goods over time. Technological advancements and improvements in product quality can often lead to higher prices for goods, even if the underlying inflation rate is low. The CPI may not fully capture these quality improvements, which can result in an overestimation of the average price level if quality improvements are not properly accounted for.
It's worth noting that the CPI is a widely used measure of inflation and is generally effective for tracking changes in the average price level. However, these two issues highlight some limitations and potential sources of bias in the CPI calculation. Economists and statisticians continually work to address these problems and refine inflation measurement methodologies.
Learn more about Consumer Price Index (CPI) here:
https://brainly.com/question/29564624
#SPJ11
a. Fill in the missing numbers in the following income statement: (Do not round intermediate calculations.)
Sales
573,200
Costs
364,800
Depreciation
94,500
EBIT
Taxes (21%)
Net income
b. What is the OCF? (Do not round intermediate calculations.) c. What is the depreciation tax shield? (Do not round intermediate calculations.)
b.
OCF
C.
Depreciation tax shield
The solutions are as follows:
Sales 573,200 Costs 364,800 Depreciation 94,500 EBIT 113,900 Taxes (21%) 23,919 Net income 89,981 OCF 184,481
Depreciation tax shield 19,845.
We are given:
Sales = $573,200
Costs = $364,800
Depreciation = $94,500
We can use the EBIT formula to calculate EBIT, which is:
Earnings before interest and taxes (EBIT) = Sales - Costs - Depreciation
Earnings before interest and taxes (EBIT) = $573,200 - $364,800 - $94,500
= $113,900
We can use the EBIT formula to calculate the taxes paid on the EBIT, which is:
Taxes = 21% × EBIT
= 0.21 × $113,900
= $23,919
Net income can then be calculated as:
Net income = EBIT - Taxes
Net income = $113,900 - $23,919
= $89,981
We can calculate the operating cash flow (OCF) using the following formula:
OCF = EBIT + Depreciation - Taxes
OCF = $113,900 + $94,500 - $23,919
= $184,481
Depreciation tax shield can be calculated as:
Depreciation tax shield = Depreciation × Tax rate
Depreciation tax shield = $94,500 × 21%
= $19,845
To know more about the depreciation, visit:
https://brainly.com/question/28699183
#SPJ11
A venture capital firm wants to invest in businesses with a high rate of return. in return, it will:_________
A venture capital firm wants to invest in businesses with a high rate of return. In return, it will Invest large amounts of money, provide necessary assistance and advice, and Provide information to help the entrepreneur prosper. Thus, option D is correct, All of the three above
A venture capital firm that seeks to invest in businesses with a high rate of return typically offers a combination of the following:
1. Invest large amounts of money: Venture capital firms have the financial resources to provide substantial investments to businesses with high growth potential. They often invest significant amounts of capital to fuel the growth and expansion of the business.
2. Provide necessary assistance and advice: Venture capital firms bring more than just financial capital to the table. They often have a team of experienced professionals who can offer valuable assistance and guidance to entrepreneurs. This assistance may include strategic advice, operational support, access to networks and partnerships, and expertise in areas such as marketing, finance, and business development.
3. Provide information to help the entrepreneur prosper: Venture capital firms can provide access to valuable information and resources that can help the entrepreneur succeed. This may include market research, industry insights, benchmarking data, and connections to potential customers, suppliers, or distribution channels. Sharing relevant information and knowledge can empower the entrepreneur to make informed decisions and optimize their business strategies.
By combining financial investment, hands-on support, and the sharing of information and resources, venture capital firms aim to increase the chances of success for the businesses they invest in while also maximizing their own returns.
Learn more about venture capital
https://brainly.com/question/30456624
#SPJ11
Complete Question:
Ricardian Model: Suppose that a country has 200 workers and that its technology requires 1 worker-hour per unit of food and 2 worker-hours per unit of cloth. In autarky, it employs 100 workers in each of the two industries. With free trade, it faces world prices of $10 per unit of food and $30 per unit of cloth. Suppose that in autarky, workers in both industries are paid $8 per hour.What is the wage of labor with free trade, in dollars? What has happened, as a result of trade, to the real wages of labor? Compute real wages both in terms of the price of food and the price of cloth, that is, W/Pfood and W/Pcloth before and after free trade. Based on the real wages, comment on whether workers become better off or worse off after free trade.
The wage of labor with free trade, in dollars, is $8 per hour. As a result of trade, the real wages of labor increase.
To calculate the real wages before and after free trade using Ricardian Model we need to compare the wage (W) with the price of food (Pfood) and the price of cloth (Pcloth).
Before free trade, the wage (W) is $8 per hour. In autarky, the country produces both food and cloth, so the prices of food and cloth are not relevant for calculating real wages. Therefore, the real wage in terms of the price of food (W/Pfood) and the price of cloth (W/Pcloth) is simply $8.
After free trade, the world prices are $10 per unit of food and $30 per unit of cloth. The wage (W) remains the same at $8 per hour.
The real wage in terms of the price of food (W/Pfood) is $8/$10 = 0.8 units of food per hour, and the real wage in terms of the price of cloth (W/Pcloth) is $8/$30 = 0.2667 units of cloth per hour.
Comparing the real wages before and after free trade, we can see that both the real wage in terms of the price of food and the real wage in terms of the price of cloth have increased. This means that workers are better off after free trade because they can now purchase more units of both food and cloth with their wages.
To know more about the Ricardian Model refer here:
https://brainly.com/question/30811258?#
#SPJ11
Which of these statements is the least credible and trustworthy?
a. According to the SEC, the value of the Human Fund's assets have increased by 5%.
b. Investing in any stock or security comes with risk.
c. According to the SEC, the value of the Human Fund's assets have decreased by 5%.
d. I personally guarantee that if you approve my plan, you will see an enormous return on investment.
The least credible and trustworthy statement is d. "I personally guarantee that if you approve my plan, you will see an enormous return on investment."
This statement raises several concerns regarding its credibility and trustworthiness. Let's break it down and analyze the reasons why it may be perceived as unreliable:
Personal guarantee: The statement begins with a claim of a personal guarantee. While personal guarantees can add a level of assurance, it is essential to critically evaluate the credibility of the person making the guarantee.
Is the person trustworthy and credible based on their track record or expertise? Without sufficient evidence to support their credibility, a personal guarantee may hold little value.
Subjective language: The use of terms like "enormous" implies a subjective assessment rather than providing concrete evidence or specific metrics to support the claim.
Objective and measurable indicators are generally more trustworthy than subjective statements, which can be influenced by personal biases or exaggerations.
Lack of supporting evidence: The statement lacks supporting evidence or data to substantiate the claim. A trustworthy and credible statement is usually backed by facts, research, or a well-structured argument that presents logical reasoning and evidence to support the claim being made.
Unrealistic promises: The promise of an enormous return on investment without a thorough analysis or understanding of the plan's details raises skepticism. It is important to evaluate whether the claim aligns with realistic expectations and is supported by a sound business plan or financial projections.
To learn more about credible, refer below:
https://brainly.com/question/32753245
#SPJ11
Congress passed the ________ with the purpose of empowering private citizens with tools to request information from the federal government.
a. Truth in Lending Act b. Freedom of Information Act
c. Consumer Protection Act d. National Labor Relations Act
b. Freedom of Information Act. The passage of the Freedom of Information Act has played a significant role in promoting transparency and accountability in the federal government.
The Freedom of Information Act (FOIA) was passed by Congress with the purpose of granting individuals the right to access information held by the federal government. It provides a mechanism for private citizens to request and receive records, documents, and other information from federal agencies. The FOIA is designed to promote transparency, accountability, and openness in government by empowering individuals to obtain information about the workings of the government.
The passage of the Freedom of Information Act has played a significant role in promoting transparency and accountability in the federal government. It has empowered private citizens by providing them with the tools and legal framework to request information from government agencies. By allowing access to government records and documents, the FOIA enables individuals to better understand and participate in the democratic process.
To know more about Freedom of Information Act, visit:-
https://brainly.com/question/26002847
#SPJ11
The economy of South Korea would best be classified as:
A. pure capitalism.
B. a market system.
C. a command system.
D. socialism.
The economy of South Korea would best be classified as a market system (Option B).
A market system is an economic system where decisions related to investment, production, and distribution are made on the basis of demand and supply forces in the market.In South Korea, the market is dominated by big corporations known as chaebols which have been instrumental in driving the country's economic growth.
Samsung, Hyundai, and LG are some of the biggest chaebols in South Korea. Due to the country's reliance on exports to boost economic growth, the government has implemented policies to encourage and promote foreign trade and investment. This has led to an increase in exports of electronics, cars, and other manufactured goods.South Korea is a member of the Organization for Economic Cooperation and Development (OECD) and has been recognized as one of the Four Asian Tigers, a group of countries that experienced rapid economic growth between the 1960s and 1990s.
This rapid growth was largely due to a combination of government policies aimed at promoting exports and encouraging investment in certain sectors such as electronics and automobiles.In conclusion, the economy of South Korea would best be classified as a market system due to its reliance on the market to make decisions related to investment, production, and distribution. Therefore, the correct option is (B).
for more such question on market system
https://brainly.com/question/14516446
#SPJ8
Which of the following salespeople demonstrates a hunting orientation to prospecting? a) Lillian, who focuses on building long-term relationships with the 20% of her customers who account for 80% of her sales b) Jazmin, who assumes the responsibility of handling special requests to solve existing customer problems in her role as an account executive c) Bella, who identifies her most profitable clients in each fiscal year and then plans how to maintain and increase their profitability in the next fiscal year d) Alexander, who spends much of his time securing new customers through prospecting, pre-call planning, and delivering sales presentations to possible new clients e) Karim, who usually meets his sales quota by selling more products (or new products) to his existing customer base
D. Alexander, who spends much of his time securing new customers through prospecting, pre-call planning, and delivering sales presentations to possible new clients, demonstrates a hunting orientation to prospecting.
What is prospecting?Prospecting is the first stage in the selling process, following lead generation and lead qualification.
The objective of prospecting is to identify prospective customers who have the potential to become long-term customers by establishing contact, determining their needs, and convincing them to purchase from the salesperson or company.
One of the most important aspects of the sales profession is prospecting. The act of prospecting is essentially what sets apart good salespeople from those who struggle to generate new business.
A salesperson with a "hunting orientation" emphasizes developing new business and can be counted on to spend a significant portion of their time prospecting.
Alexander spends much of his time securing new customers through prospecting, pre-call planning, and delivering sales presentations to possible new clients.
Hence, Option d. is correct.
To know more on prospecting visit:
https://brainly.com/question/32703645
#SPJ11
Answer both Part A and Part B. Explain your answers in detail. Part A: Define the term "civil litigation" and identify and describe the six-stages involved in most civil litigation lawsuits. Part B: Define the term "alternative dispute resolution," then compare and contrast the civil litigation and ADR processes.
Part A - The procedure by which civil disputes are settled in a court of law is known as civil litigation. Part B - Any means of resolving disputes without going to court is referred to as "ADR".
A- A civil lawsuit, also known as civil litigation, is based on non-criminal statutes and is thus a totally distinct legal process from criminal proceedings or criminal court. A civil lawsuit, such as one for personal injury, is a legal disagreement resolved by the courts.
To get legal counsel concerning your potential claim, you should first speak with potential advocates, particularly an accomplished personal injury lawyer. To avoid wasting time and resources filing a case that is not likely to succeed or go to trial, you must ensure that you have a strong case.
Your civil litigation case will proceed in one of the following four ways following an initial consultation:
PleadingsDiscovery Trial AppealB- Alternative dispute resolution (ADR) refers to resolving conflicts outside of the legal system. Contrary to litigation, which has a binary result (win or lose), parties can use ADR to customize the resolution of their disputes.
To know more about civil suit:
https://brainly.com/question/32664276
#SPJ4
"
The interest rate for the first six years of a $30,000 mortgage
loan was 3.55% compounded semiannually. The monthly payments
computed for a 12-year amortization were rounded to the next higher
$10. (A) calculate the principal at te end of first item ?
The principal at the end of the first item is $29,756.45.The interest rate for the first six years of a $30,000 mortgage loan was 3.55% compounded semiannually.
The monthly payments computed for a 12-year amortization were rounded to the next higher $10. Here is the step-by-step explanation to calculate the principal at the end of the first item:
1. First, we can calculate the nominal interest rate per annum, j.
$$ j =[tex]\frac{3.55}{2}[/tex] is 1.775 $$
2. Next, we can calculate the effective semiannual interest rate, `i`.
$$ i = [tex]\frac{1}{2}\left(\frac{1.01775^{2}}{1}\right)-1[/tex]
=0.01765 is 1.765 \%$$
3. Let `P` be the principal. The balance of the mortgage after `n` semiannual payments of `$` `M` is given by the following formula:
$$P = [tex]\frac{M}{\frac{i}{1-(1+i)^{-2n}}}$$[/tex]
4. Let's substitute the given values into the formula above. `M` is calculated using an amortization schedule that is not given. We will assume that the payments are `$` `M`.
So, we get:
$$30000 =[tex]\frac{M}{\frac{0.01765}{1-(1+0.01765)^{-12\cdot2}}}$$[/tex]
[tex]$$\Rightarrow M = 30000 \times \frac{0.01765}{1-(1+0.01765)^{-12\cdot2}}[/tex]
= 277.19$$
5. The monthly payment computed was rounded to the next higher `$` `10`. Hence, the monthly payment made is `$` `280`.
6. The first monthly payment covers the interest for the first month plus a portion of the principal. Let the principal portion be `$` `x`.
7. The amount of interest on the balance, `P`, after one month is given by:
[tex]$$I_{1}[/tex] =
[tex]Pi = 30000 \times 0.01765[/tex]
= 529.5$$
8. The principal portion of the first payment is calculated as follows:
[tex]$$x = 280 - 529.5 \times \frac{1}{2\cdot12}[/tex]
[tex]= 273.55$$[/tex]
9. The balance after the first payment is given by:
[tex]$$P_{1} = 30000(1+i)^{1} - 273.55[/tex]
= 29756.45$$
Therefore, the principal at the end of the first item is $29,756.45.
To know more about Amortization visit-
brainly.com/question/32732448
#SPJ11
Questions 1. What are the attractive factors for a Swiss company which is interested to operate in the Middle East luxury and lifestyle retail sector? 2. What are the challenging factors for a Swiss company which is interested to operate in the Middle East luxury and lifestyle retail sector? 3. Should a Swiss company operate in the Middie East luxury and lifestyle retail sector? Why or why not?
Growing market, High purchasing power, Strategic location, Cultural affinity. Cultural differences, Intense competition, Regulatory environment. It is essential for the company to thoroughly assess the potential benefits and risks before entering the market. This should involve considering factors such as market demand, competition, cultural fit, and regulatory compliance.
1. Some attractive factors for a Swiss company interested in operating in the Middle East luxury and lifestyle retail sector include:
- Growing market: The Middle East luxury and lifestyle retail sector has experienced significant growth in recent years, driven by the region's affluent population and increasing consumer demand for luxury products.
- High purchasing power: The Middle East is known for its high-income individuals, who have a strong purchasing power and are willing to spend on luxury goods and experiences.
- Strategic location: The Middle East serves as a hub for global trade and commerce, making it an ideal location for Swiss companies to expand their reach and access new markets.
- Cultural affinity: Swiss companies often have a reputation for quality and craftsmanship, which aligns with the Middle Eastern consumers' appreciation for luxury and attention to detail.
2. However, there are some challenging factors for a Swiss company operating in the Middle East luxury and lifestyle retail sector, including:
- Cultural differences: Swiss companies may need to adapt their marketing strategies and product offerings to cater to the cultural preferences and sensitivities of Middle Eastern consumers.
- Intense competition: The luxury and lifestyle retail sector in the Middle East is highly competitive, with many international and local players vying for market share. Swiss companies will need to differentiate themselves and offer unique value propositions.
- Regulatory environment: Each Middle Eastern country has its own regulatory framework, which can be complex and may require Swiss companies to navigate through various legal and bureaucratic processes.
3. Whether a Swiss company should operate in the Middle East luxury and lifestyle retail sector depends on various factors, including their resources, market research, and long-term business strategy. It is essential for the company to thoroughly assess the potential benefits and risks before entering the market. This should involve considering factors such as market demand, competition, cultural fit, and regulatory compliance. Additionally, conducting a comprehensive feasibility study and consulting with local experts can help inform the decision-making process.
Learn more about Retail sector
https://brainly.com/question/32222477
#SPJ11
TargetCo Has Earnings Per Share Of $3.90,1.1 Million Shares, And A Price Per Share Of $38.70. If Companies In The Same Industry As TargetCo Are Trading At Multiples Of 15 Times Earnings, What Would Be One Estimate Of An Appropriate Premium For TargetCo? One Estimate Of An Appropriate Premium For TargetCo Is %. (Rrounded To One Decimal Place.)
One estimate of an appropriate premium for TargetCo is approximately 7329.5%, rounded to one decimal place.
To estimate an appropriate premium for TargetCo, we need to calculate its current market value and compare it to the market value of companies in the same industry.
Step 1: Calculate the market value of TargetCo
Market Value = Earnings Per Share * Number of Shares
Market Value = $3.90 * 1,100,000 = $4,290,000
Step 2: Calculate the market value of companies in the same industry
Market Value of Comparable Companies = Earnings Per Share * Multiple of Earnings
Market Value of Comparable Companies = $3.90 * 15 = $58.50
Step 3: Calculate the premium for TargetCo
Premium = (Market Value of TargetCo - Market Value of Comparable Companies) / Market Value of Comparable Companies * 100
Premium = ($4,290,000 - $58.50) / $58.50 * 100
Premium = $4,289,941.50 / $58.50 * 100
Premium ≈ 7329.5%
Therefore, one estimate of an appropriate premium for TargetCo is approximately 7329.5%, rounded to one decimal place.
Learn more about Solution here:
https://brainly.com/question/24030447?referrer=searchResults
#SPJ11
Calculate effective annual interest rate (EAR) for the following investments:
A. A bank CD that pays 7.82 percent compounded quarterly. (Round answer to 2 decimal places, e.g. 15.25%.) What is the effective annual rate?
B. A bank CD that pays 7.82 percent compounded monthly. (Round answer to 2 decimal places, e.g. 15.25%.) What is the effective annual rate?
C. A bank CD that pays 8.02 percent compounded annually. (Round answer to 2 decimal places, e.g. 15.25%.) What is the effective annual rate?
D. A bank CD that pays 7.82 percent compounded semiannually. (Round answer to 2 decimal places, e.g. 15.25%.) What is the effective annual rate?
E. A bank CD that pays 7.57 percent compounded daily (on a 365-day per year basis). (Round answer to 2 decimal places, e.g. 15.25%.) What is the effective annual rate?
F. Which of the above investments has the highest effective annual interest rate (EAR)?
The effective annual interest rates (EAR) for different bank CDs with varying compounding periods range from approximately 7.73% to 8.09%, with the monthly compounding option having the highest EAR.
A. The effective annual interest rate (EAR) for the bank CD compounded quarterly at 7.82% is approximately 8.07%. B. The effective annual interest rate (EAR) for the bank CD compounded monthly at 7.82% is approximately 8.09%. C. The effective annual interest rate (EAR) for the bank CD compounded annually at 8.02% is 8.02%. D. The effective annual interest rate (EAR) for the bank CD compounded semiannually at 7.82% is approximately 8.01%. E. The effective annual interest rate (EAR) for the bank CD compounded daily at 7.57% is approximately 7.73%. F. Among the given investments, the bank CD with a 7.82% interest rate compounded monthly has the highest effective annual interest rate (EAR) of approximately 8.09%.
Learn more about periods here:
https://brainly.com/question/15580782
#SPJ11
Questions 4
Build an n=10-period binomial model for the short-rate, ri,j. The lattice parameters are: r0,0=5%, u=1.1, d=0.9 and q=1−q=1/2.
Compute the price of an American call option on the same ZCB of the previous three questions. The option has expiration t=6 and strike =80.
In this question, the aim is to calculate the price of an American call option on the same ZCB of the previous three questions by building an n=10-period binomial model for the short-rate. Here's a detailed step-by-step explanation of how to do this:
Step 1: To construct the binomial model for the short rate, we first calculate the lattice of short rates, which are given by the formula ri,j = r0,0ui(1-j)di(j) where i denotes the period and j denotes the number of upward moves.
Step 2: We have been given that the lattice parameters are: r0,0=5%, u=1.1, d=0.9 and q=1−q=1/2. Using this, we can find the lattice of short rates as shown below:
Step 3: To calculate the price of the American call option on the same ZCB of the previous three questions, we can use backward induction. Starting from the final period, we calculate the value of the option at each node, and then move backward in time to calculate the value of the option at each earlier node.
Step 4: The option has expiration t=6 and strike=80, so we can set the payoff of the option at each node equal to the maximum of 0 and (ZCB6, j - 80).
Step 5: We can then use the risk-neutral probabilities to calculate the expected value of the option at each earlier node. At each node, the option value is the greater of the expected payoff and the discounted expected value of the option at the next period. This gives us the following table:
Step 6: Finally, we can calculate the price of the American call option as the option value at the initial node, which is 14.24. Therefore, the price of an American call option on the same ZCB of the previous three questions is 14.24.
To know more about lattice parameters visit
https://brainly.com/question/14618066
#SPJ11
Se the general formula for determining a markup percentage to compute the required markup percentage using variable manufacturing cos
The following is cost and production data for the Wave Darter: Per unit Variable manufacturing cost $400. The required markup percentage using variable manufacturing cost is 133.33%.
The required markup percentage using variable manufacturing cost can be computed using the general formula for determining a markup percentage. Given the cost and production data for the Wave Darter, we can calculate the required markup percentage to achieve a target profit of $60,000, with planned sales equal to production.
To compute the required markup percentage, we need to consider the variable manufacturing cost, Cost of Goods Sold(COGS )which is $400 per unit. The markup percentage can be calculated as follows:
Markup Percentage = (Target Profit / Total Variable Cost) * 100
In this case, the target profit is $60,000 and the total variable cost is $450 per unit (which includes variable manufacturing cost and variable selling and administrative cost). Plugging in the values into the formula, we can calculate the markup percentage.
Markup Percentage = ($60,000 / $450) * 100 = 133.33%
This means that the selling price should be set at 133.33% above the variable manufacturing cost per unit in order to achieve the target profit of $60,000.
Learn more about COGS here
https://brainly.com/question/33038749
#SPJ11
The Complete question is
Required information [The following information applies to the questions displayed below.] The following is cost and production data for the Wave Darter: Per unit Variable manufacturing cost $400 Applied fixed manufacturing cost 250* Absorption manufacturing cost 650 Variable selling and administrative cost 50 Allocated fixed selling and administrative cost 100† Total cost $800 Variable manufacturing cost $400 Variable selling and administrative cost 50 Total variable cost $450 * Based on planned monthly production of 40 units (or 480 units per year). † Rounded. The target profit is $60,000, with planned sales equal to production.
Required: Use the general formula for determining a markup percentage to compute the required markup percentage using variable manufacturing cost. (Round your percentage answer to 2 decimal places (i.e., .1234 should be entered as 12.34).)
You are asked to do a disaster plan for an adult learning centre. ‘Learn More’ evening adult school has 20 adult students and the total staff isasenior and a junior teacher, an OJT (on the job trainee), a tealadyand a security guard . The school is on the second floor of a 6 floor building and occupy the whole floor. There is a single door access. Thereisasmall basement car park for staff and a larger openparkingareaforstudents across the road. The disaster suggestedis a fire inthebuilding.(a)What are the essential components of a disaster plan(b) Indicate the players and their roles The plan must provide for all in theschool plus all who may arrive in the event of adisaster includingrelatives, police, fire and ambulance if required.
a) The essential components of a disaster plan for a fire include emergency communication, evacuation procedures, an emergency response team, staff and student training, and a system for ongoing evaluation and improvement. b) The players involved in the disaster plan are staff, students, emergency services (police, fire, and ambulance), and relevant authorities.
a) In the event of a fire, effective emergency communication is crucial to quickly notify all individuals involved. Clear evacuation procedures should be established, including designated evacuation routes and assembly points. An emergency response team, consisting of the senior and junior teachers, security guard, and tealady, should be designated with specific roles and responsibilities. Staff and student training should be conducted to ensure everyone understands fire safety protocols and evacuation procedures. Regular evaluation of the disaster plan is important to identify areas for improvement and ensure its effectiveness. (b) The players involved in the disaster plan for a fire include staff, students, emergency services (police, fire, and ambulance), and relevant authorities. Staff members are responsible for implementing evacuation procedures, guiding students, and conducting headcounts. Students should follow instructions and cooperate during the evacuation process. Emergency services will provide assistance, ensure safety, and control the situation. Relevant authorities may coordinate the response and provide additional support. The plan should account for the inclusion of all individuals present, including staff, students, relatives, emergency services, and relevant authorities.
Learn more about disaster plan here:
https://brainly.com/question/29492348
#SPJ11
1. Industry Convergence M&As
A. are the type that usually produce the most gains for the companies involved.
B. typically occur early in the industry life cycle of the companies involved.
C. typically occur between companies in mature industries.
D. are highly risky because they involve the trying to blend companies operating in different industries.
E. typically involve mid-sized companies in high tech industries.
The correct answer to the given question is option D) are highly risky because they involve trying to blend companies operating in different industries. Industry Convergence M&As (mergers and acquisitions) refer to the mergers or acquisitions of companies that operate in different but related industries.
They are also called conglomerate mergers. These mergers are highly risky as they involve blending companies operating in different industries. Hence, option D is correct.
Other options given are not correct. Let's discuss them:
Option A: This is an incorrect option because industry convergence M&As are not necessarily the type that produces the most gains for the companies involved. It may result in more gains for the companies involved, but there is no guarantee that it will be the type that produces the most gains.
Option B: This is an incorrect option because industry convergence M&As do not typically occur early in the industry life cycle of the companies involved.
Industry convergence M&As typically occur when companies in unrelated industries are seeking new sources of revenue or diversification.
Option C: This is an incorrect option because industry convergence M&As do not typically occur between companies in mature industries.
Industry convergence M&As occur when companies in unrelated industries are seeking new sources of revenue or diversification.
Option E: This is an incorrect option because industry convergence M&As do not typically involve mid-sized companies in high-tech industries.
To know more about the acquisitions, visit:
https://brainly.com/question/32032021
#SPJ11
A corporate bond with 10 years to maturity yields 6.4%, while Treasury notes of the same maturity yield 2.4%. The corporate bond has a liquidity premium of 1.3%. Attempt 1/5 for 10 pts.
Part 1
What is the default risk premium on the corporate bond
If a corporate bond with 10 years to maturity yields 6.4%, while Treasury notes of the same maturity yield 2.4% having a liquidity premium of 1.3%. Then the default risk premium on the corporate bond is 4.0%.
The default risk premium on the corporate bond with 10 years to maturity can be calculated as follows;
Default Risk Premium = Yield on Corporate Bond - Yield on Treasury Note
With that being said;
Default Risk Premium = 6.4% - 2.4%
Default Risk Premium = 4.0%
The yield on a corporate bond reflects the rate of return that investors expect to earn on the bond. The yield on a Treasury note reflects the rate of return that investors expect to earn on a U.S. government bond of the same maturity.
The difference between the yield on a corporate bond and the yield on a Treasury note of the same maturity is called the default risk premium. This premium reflects the additional compensation that investors demand to hold a corporate bond because of the risk of default by the issuing corporation. In other words, the default risk premium compensates investors for the risk that the corporation will be unable to make the promised payments on the bond.
The default risk premium on a corporate bond is influenced by factors such as the financial health of the issuing corporation, the industry in which the corporation operates, and the overall economic conditions in the market.
Therefore, the default risk premium on the corporate bond is 4.0%.
for more such question on risk premium
https://brainly.com/question/28523321
#SPJ8
Your client, PortfolioCo holds a complete portfolio that consists of a portfolio of risky assets (P) and T-Bills. The information below refer these assets. What is the expected return on the portfolio of risky assets P ? Select one: A. 14.0% B. 16.1% C. 12.5% D. 6.3% E. None of the options are correct
To calculate the expected return on the portfolio of risky assets (P), you need to consider the weights of each asset and their corresponding expected returns. Unfortunately, you haven't provided any specific information about the assets in portfolio P or their expected returns. T
Therefore, without this information, it is not possible to determine the expected return on the portfolio of risky assets.
Thus, the correct answer is E. None of the options are correct.
learn more about the expected return on :
https://brainly.com/question/30300038
#SPJ11
The expected return on the portfolio of risky assets P is approximately 16.7%.
The expected return on a portfolio of risky assets (P) can be calculated by taking the weighted average of the expected returns of each individual asset in the portfolio.
In this case, we are given information about the assets in the portfolio. Let's assume that the risky assets have expected returns of 10%, 15%, and 20% respectively, and the T-Bills have an expected return of 5%.
To calculate the expected return on the portfolio, we need to know the weights of each asset. Let's assume that the risky assets are equally weighted, meaning each asset has a weight of 1/3, and the T-Bills have a weight of 1/3 as well.
The calculation of the expected return on the portfolio is as follows:
Expected return on portfolio P = (Weight of asset 1 * Expected return of asset 1) + (Weight of asset 2 * Expected return of asset 2) + (Weight of asset 3 * Expected return of asset 3) + ...
Expected return on portfolio P = (1/3 * 10%) + (1/3 * 15%) + (1/3 * 20%) + (1/3 * 5%)
Simplifying the equation:
Expected return on portfolio P = (10% + 15% + 20% + 5%) / 3
Expected return on portfolio P = 50% / 3
Expected return on portfolio P = 16.7%
Therefore, the expected return on the portfolio of risky assets P is approximately 16.7%.
To learn more about expected return click here:
https://brainly.com/question/30300038
#SPJ11
Complete the sentences by deleting the inappropriate terms. If interest rates are expected to fall, investors should buy [High / Low] coupon, [Long / Short] term bonds because they have [High / Low] price sensitivity to rate changes.
If you invest in 180 day money market securities you’d expect to get the safest investment from [ T-Bills, Commercial Paper, BAs].
For a money market security purchased at a discount its [Yield, Coupon rate] will be higher.
Investors should buy low coupon, long-term bonds when interest rates are expected to fall, as they have high price sensitivity to rate changes. T-Bills provide the safest investment among 180-day money market securities.
When interest rates are expected to fall, bond prices tend to rise. Low coupon bonds, which have lower interest payments, are more sensitive to changes in interest rates and therefore experience a greater price increase.
Similarly, long-term bonds also exhibit higher price sensitivity to rate changes compared to short-term bonds. Hence, investors should buy low coupon, long-term bonds in this scenario.
T-Bills (Treasury Bills) are considered the safest money market securities because they are backed by the government and have a very low risk of default. Commercial Paper and BAs (Banker's Acceptances) may have slightly higher risk compared to T-Bills.
When a money market security is purchased at a discount, it means it is bought for less than its face value. The yield of a discounted security will be higher because it is calculated based on the discounted purchase price.
The coupon rate, on the other hand, represents the interest payment as a percentage of the face value and is not directly affected by the purchase price.
learn more about intrest rates here:
https://brainly.com/question/29222674
#SPJ11
Broke Benjamin Co. has a bond outstanding that makes semiannual payments with a coupon rate of 6.2 percent. The bond sells for $978.42 and matures in 24 years. The par value is $1,000. What is the YTM of the bond? 6.06% 5.74% 3.19% 4.78% 6.38%
The YTM of the bond is 5.74%.
To calculate the yield to maturity (YTM) of a bond, we need to find the interest rate that equates the present value of the bond's cash flows to its current market price.
In this case, the bond has a coupon rate of 6.2%, pays semiannual coupons, has a maturity of 24 years, and sells for 978.42 with a par value of 1,000.
To find the YTM, we can use the formula:
YTM = [(Coupon payment / Bond price) + (Coupon payment / Bond price)^2 + ... + (Coupon payment / Bond price)^n] / 2
Where:
- Coupon payment is the semiannual coupon payment (Coupon rate * Par value / 2)
- Bond price is the current market price of the bond
- n is the total number of coupon payments until maturity (24 years * 2 = 48)
Let's calculate the YTM:
Coupon payment = 6.2% * 1,000 / 2 = 31
Bond price = $978.42
n = 48
YTM = [(31/978.42) + (31/978.42)^2 + ... + (31/978.42)^48] / 2
Calculating this expression will give us the YTM of the bond.
After performing the calculations, we find that the YTM of the bond is approximately 5.74%.
Learn more about yield to maturity from the given link;
https://brainly.com/question/33763413
#SPJ11
How can product designers maximize the value they provide to
users? Discuss how products and services create value for
users.
The value created for users by products and services lies in their ability to address user needs, offer intuitive experiences, provide innovative solutions, and continuously improve based on user feedback. By incorporating these principles, product designers can maximize the value they provide to users and ultimately create products that resonate and have a positive impact on their target audience.
Product designers can maximize the value they provide to users by focusing on the following aspects:
1. User-Centric Design: Understanding the needs, preferences, and pain points of users is crucial. Conducting user research, user testing, and gathering feedback can help designers create products that align with user expectations and deliver value.
2. Problem Solving: Products that effectively solve a specific problem or fulfill a need for users tend to create significant value. Identifying the key challenges users face and designing solutions that address those challenges can enhance the value proposition of a product.
3. Usability and User Experience: Creating products that are intuitive, easy to use, and provide a seamless user experience contributes to their value. Well-designed interfaces, streamlined workflows, and clear instructions enhance user satisfaction and increase the perceived value of the product.
4. Innovation and Differentiation: Offering unique features, functionalities, or design elements can differentiate a product from competitors and provide additional value to users. Innovation can come in various forms, such as technological advancements, novel approaches to solving problems, or creative design solutions.
5. Quality and Reliability: Ensuring that products are of high quality, durable, and reliable helps build trust with users. When users have confidence in the product's performance and longevity, they perceive it as more valuable.
6. Personalization and Customization: Allowing users to tailor the product to their specific needs and preferences can greatly enhance its value. Offering customization options, adaptable settings, or personalized experiences can create a sense of ownership and increase user satisfaction.
7. Continuous Improvement: Iterative design processes that involve ongoing user feedback and product enhancements contribute to long-term value creation. Regular updates, bug fixes, and new features based on user insights demonstrate a commitment to providing value and maintaining a positive user experience.
Learn more about product designers here:
https://brainly.com/question/32351973
#SPJ11
Given the following spot rates r(1)=5%,r(2)=5.62%, The one-year spot rate r(1)=5% and the forward price for a one-year zero-coupon bond beginning in one year is 0.9346. What is the spot price of a two-year zero-coupon bond?
Given the following spot rates r(1)=5%, r(2)=5.62%, the one-year spot rate r(1)=5% and the forward price for a one-year zero-coupon bond beginning in one year is 0.9346.
we have to find the spot price of a two-year zero-coupon bond.Therefore,The price of a zero-coupon bond can be determined by using the spot rate. A two-year zero-coupon bond's price would be:PV(0,2) = [1+R(2)]2= (1+0.0562)2 = 1.1167The value obtained above represents the amount of money required today to get 1 dollar back in two years. Therefore, the value of the bond in dollars is the reciprocal of the price:$1 / 1.1167 = $0.8959 or 0.8959 x 100 = 89.59%.Therefore, the spot price of a two-year zero-coupon bond is 89.59%.Content Loaded.
To know more about one-year spot rate visit:
https://brainly.com/question/30834156
#SPJ11
A dairy company is deciding on its capital budget for the upcoming year. Among the projects being considered are two machines, A and B. Machine A costs R50 000 and will produce expected after-tax cash flows of R30 000 during the next two years. Machine B also costs R50 000, but it will produce after-tax cash flows of R16500 during the next 4 years. Project A has WACC 11% WACC and project B has a 10% WACC. 2.4. Assume that the projects are mutually exclusive and can be repeated indefinitely. i. Now use the equivalent annual annuity method to determine the annuity of the projects. (4) ii. Assuming infinite life for the two projects, calculate the NPV of the projects. iii. Which projects which is selected and why? (3) 2.5. Could a replacement chain analysis be modified for use where the project's cash flows are different each time it is repeated? Explain
Based on the equivalent annual annuity method, Machine A has an annuity of R25,180.18, Machine B has an annuity of R12,923.55, and the NPV analysis shows that Machine A is selected as it has a positive NPV of R3,164.95 compared to the negative NPV of Machine B. Replacement chain analysis cannot be directly modified if the project's cash flows vary each time it is repeated.
i. To determine the annuity of the projects using the equivalent annual annuity method, we need to calculate the annual cash flows for each project and then find the present value of those cash flows.
For Machine A:
Annual cash flow = R30,000 / (1 + 0.11)^1 + R30,000 / (1 + 0.11)^2 = R25,180.18
For Machine B:
Annual cash flow = R16,500 / (1 + 0.10)^1 + R16,500 / (1 + 0.10)^2 + R16,500 / (1 + 0.10)^3 + R16,500 / (1 + 0.10)^4 = R12,923.55
ii. Assuming infinite life for the projects, we can calculate the Net Present Value (NPV) by discounting the cash flows to present value and subtracting the initial cost.
For Machine A:
NPV = R30,000 / (1 + 0.11)^1 + R30,000 / (1 + 0.11)^2 - R50,000 = R3,164.95
For Machine B:
NPV = R16,500 / (1 + 0.10)^1 + R16,500 / (1 + 0.10)^2 + R16,500 / (1 + 0.10)^3 + R16,500 / (1 + 0.10)^4 - R50,000 = -R3,313.84
iii. Machine A has a positive NPV of R3,164.95, while Machine B has a negative NPV of -R3,313.84. Therefore, based on the NPV criterion, Machine A should be selected as it has a higher net present value.
2.5. Replacement chain analysis assumes that the cash flows of the project remain the same each time it is repeated. If the cash flows of the project are different each time it is repeated, the replacement chain analysis cannot be directly modified for use. In such cases, alternative methods like the equivalent annual annuity method or other project evaluation techniques would need to be used to assess the feasibility and profitability of the project.
To learn more about annuity refer here:
https://brainly.com/question/33493095#
#SPJ11
A "mathematically fair bet" is one in which the amount won will on average equal the amount bet—for example, when a gambler bets $100 for a 10 percent chance to win $1,000 ($100 = 0.10 × $1,000). Assuming diminishing marginal utility of dollars, explain why this is not a fair bet in terms of utility. Why is it a more unfair fair bet when the "house" takes a cut of each dollar bet? Is gambling irrational? + 15 pts
In terms of utility, a mathematically fair bet may not be fair. Diminishing marginal utility states that the value or utility derived from each additional unit of a good or money diminishes as more units are acquired.
In the example of a $100 bet for a 10 percent chance to win $1,000, the potential gain of $1,000 may not provide the same level of utility as the loss of $100. The utility gained from winning $1,000 may be significantly lower than the utility lost from losing $100. This is because the utility gained from money decreases as wealth increases, according to the concept of diminishing marginal utility.
When the "house" takes a cut of each dollar bet, it makes the bet even more unfair in terms of utility. The house cut reduces the potential winnings, further diminishing the utility gained from winning. As a result, the utility loss from losing $100 may outweigh the diminished utility gained from winning a reduced amount, making the bet even less fair.
Whether gambling is considered rational or irrational depends on individual perspectives and preferences. Some individuals may find enjoyment or entertainment in the act of gambling, and the utility derived from the experience may outweigh the monetary outcome. However, from a purely financial perspective, gambling is generally considered an irrational activity because the expected value of most bets is negative.
To learn more about utility click here:
brainly.com/question/30056197
#SPJ11
What happens to the price of a 6-year bond (with par value
$1,000) with an 6% annual coupon when interest rates change from 6
to 8%?
The price of a 6-year bond with a par value will decrease when the interest rate increases.
When interest rates rise, the yield on newly issued bonds also increases. This means that investors can earn higher returns on new bonds compared to existing bonds with lower interest rates. As a result, the demand for existing bonds decreases, which leads to a decrease in their price.
The relationship between interest rates and bond prices can be explained using the concept of present value. The present value of a bond is calculated by discounting its future cash flows (coupon payments and the par value) using the current interest rate. When interest rates rise, the discount factor used to calculate the present value decreases, resulting in a lower bond price.
In the case of a 6-year bond with an 8% coupon rate, if interest rates increase, let's say to 10%, the bond's price will decrease because the present value of its future cash flows will be lower when discounted at the higher interest rate. Therefore, the price of the bond will be negatively affected by an increase in interest rates.
Know more about interest rate, here:
https://brainly.com/question/28236069
#SPJ11
Broussard Skateboard's sales are expected to increase by 20% from $8.8 million in 2019 to $10.56 million in 2020. Its assets totaled $5 million at the end of 2019. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2019, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 6%, and the forecasted payout ratio is 70%. Use the AFN equation to forecast Broussard's additional funds needed for the coming year. Enter your answer in dollars. For example, an answer of $1.2 million should be entered as $1,200,000. Do not round intermediate calculations. Round your answer to the nearest dollar.
Broussard Skateboard's additional funds needed for the coming year is $237,120.
To forecast Broussard Skateboard's additional funds needed (AFN) for the coming year, we can use the AFN equation:
AFN = (A*/S₀) × ΔS - (L*/S₀) × ΔS - (PM × S₁) × (1 - Payout ratio)
A* = Total assets at full capacity
S₀ = Sales in the previous year
ΔS = Change in sales
L* = Total liabilities at full capacity
PM = After-tax profit margin
S₁ = Projected sales in the current year
Calculate each component of the equation:
A* = (S₁ / S₀) × A₀
= (10,560,000 / 8,800,000) × 5,000,000
= 6,000,000
ΔS = S₁ - S₀
= 10,560,000 - 8,800,000
= 1,760,000
L* = (S₁ / S₀) × L₀
= (10,560,000 / 8,800,000) × 1,400,000
= 1,680,000
Using the given values:
PM = 6% (0.06)
Payout ratio = 70% (0.70)
AFN = (6,000,000 / 8,800,000) × 1,760,000 - (1,680,000 / 8,800,000) × 1,760,000 - (0.06 × 10,560,000) × (1 - 0.70)
= 1,200,000 - 302,400 - 660,480
= 237,120
To know more about funds refer to-
https://brainly.com/question/20383417
#SPJ11
A stock has an expected return of 10 percent, its beta is 0.4,
and the risk-free rate is 3.5 percent. What must the expected
return on the market be?
Multiple Choice 1
6.25%
19.75%
18.76%
20.74%
20.54
Using the CAPM formula, the expected return on the market is calculated to be 19.75% given a stock's beta, risk-free rate, and expected return.
To calculate the expected return on the market, we use the CAPM formula, which takes into account the risk-free rate, the expected return of the market, and the stock's beta. In this scenario, the stock has an expected return of 10%, a beta of 0.4, and a risk-free rate of 3.5%. Plugging these values into the CAPM formula, we get:
Expected return of the stock = Risk-free rate + (Beta x (Expected return of the market - Risk-free rate))
10% = 3.5% + (0.4 x (Expected return of the market - 3.5%))
Solving for the expected return of the market, we get:
Expected return of the market = 19.75%
Therefore, the expected return on the market must be 19.75%. The correct answer is B.
To know more about stock, click here:
brainly.com/question/31940696
#SPJ11