When you are saving or investing, the amount of expected return you receive is based on this:

Marine Midland Bank sent market researchers door-to-door in the neighborhoods surrounding its branch banks. Each researcher want

leva [86]

Answer: Individual interviews

Explanation: An individual interview can be seen as an experimental method of acquiring information from an original source to gather non-numerical information with a small number of respondents to discuss in detail their viewpoints on a specific idea, program or circumstance.

Here, the Marine Midland Bank sent out their researchers to discuss with the head of each household in the community the reason for not checking accounts and credit cards with the bank. It can be carried out in 15-60 minutes.

8 0

3 years ago

What happens if only income increases

lidiya [134]

Answer:

too crowded. better to be happy alones at homes with computers. unless you got a big home with a lot of rooms and can still be alones

7 0

3 years ago

Hibiscus Co has a debt-equity ratio of 0.80. The firm is analyzing a new project which requires an initial cash outlay of $300,0

morpeh [17]

Answer:

$321,600

Explanation:

debt equity ratio = debt / equity

since the debt to equity is 0.8, that means that for every $ invested from equity, $0.80 will be borrowed. If the new project requires an initial cash outlay of $300,000:

then $300,000 / $1.80 = $166,667 will be new equity
and $133,333 will be new debt

total cost of initial outlay including flotation costs = ($166,667 x 1.09) + ($133,333 x 1.0495) = $181,667 + $139,933 = $321,600

flotation costs include all the costs associated with issuing new stocks or taking new debt.

8 0

4 years ago

A building owner charges net rent of $20 in the first year, $21 in the second year, and $22 in the third year. Using a 10 percen

Ronch [10]

Answer:

$20.94

Explanation:

first we must determine the present value of the the 3 rent amounts:

PV = $20/1.1 + $21/1.1² + $22/1.1³ = 52.07

then you need to calculate the payment considering the following values:

principal = $52.07
n = 3
i = 10%

using a loan calculator payment = $20.9381 ≈ $20.94

7 0

3 years ago

The Saunders Investment Bank has the following financing outstanding. Debt: 120,000 bonds with a coupon rate of 8 percent and a

algol [13]

Answer:

R_Wacc = 11,35% (48%) + 8,57% (4%) + 4,18% (35%) + 3,59% (13%) = 7,70%

Explanation:

Re: 11,35% Cost of Common Equity

Re: 8,57% Cost of Preferred STOCK

Re: 4,18% Cost of Debt BONDS

Rd: 3,59% Cost of Zero BONDS

Equity :

$179,200,000 Market Value of the firm's Common Equity

Preferred Stock:

$14,700,000 Market Value of the firm's Preferred STOCK

Debt bonds :

$132,000,000 Market Value of the firm's Debt BONDS

Zero bonds :

$49,300,000 Market Value of the firm's ZERO BONDS

V: $375,200,000 E+D = Total Market Value of the firm's financing

E/V: 48% Percentage of financing that is Common Equity

PS/V: 4% Percentage of financing that is Preferred Stock

DB/V: 35% Percentage of financing that is Debt Bonds

ZB/V: 13% Percentage of financing that is Zero Bonds

Tc: 40% Corporate tax rate

Total Market Value

Market value of debt Bonds:

120,000 x $1,000 x 110% = $132,000,000

Market value of debt Zero Coupon:

290,000 x $1,000 x 17% = $49,300,000

Market value of preferred stock:

210,000 x $70 = $14,700,000

Market value of common stock:

3,200,000 x $56 = $179,200,000

TOTAL = $375,200,000

Using the CAPM model we can calculate the costo of equity:

R = 0,04 + 1,05(0,07) = 11,35%

The cost of debt is the YTM of the bonds, so:

P0= $1,110 = $40(PVIFAR%,40) + $1,000(PVIFR%,40) =

R = 6,97%

The aftertax cost of debt is:

R_Bonds : (1 - 0,4) x (0,0697) = 4,18%

The aftertax cost of zero coupon bonds is:

Yield To Maturity = (Face Value/Current Bond Price)^(1/Years To Maturity)−1 = 5,98%

(Face Value/Current Bond Price) = '$1,000/$175 (1/Years To Maturity) = 1/30

The aftertax cost of debt is:

R_ZeroB : (1 - 0,4) x (0,0598) = 3,59%

We can use the preferred stock pricing equation, which is the level perpetuity equation, so the required return on the company’s preferred stock is:

Rp= D1/P0 = $6/$70 = 8,57%

Rp = Required Return D1 = Dividend P0 = Price

8 0

3 years ago