Answer:
If a firm decreases its sustainable growth rate (g), the price of their stock will probably decrease. I will use the following example:
P₀ = Div₁ / (Re - g)
P₀ = $2 / (12% - 5%) = $28.57
if the growth rate g decreases to 2%, and the rest remains unchanged, then
P₀ = $2 / (12% - 2%) = $20
Answer:
$15.43
Explanation:
Following actions are required for triangular arbitrage:
Available: $ 10,000
Buy sterling pound @ 1 $ = 1.62 pounds and receive pounds 6172.84 upon conversion.
Now, sell these pounds and purchase NZ $ at the rate :
1 pound = NZ $ 2.95 and receive NZ$ 18209.87
Now, reconvert the above proceeds into US $ at the rate
1 NZ $ = $0.55 i.e sell NZ $ at this rate and receive US $ 10,015.4285
Hence profit from implementing triangular arbitrage is $10,015.43 - $10,000
= $15.43
Arbitrage refers to the prospect of earning a profit by utilizing the mispricing in two different financial markets. An arbitrageur never uses his own funds and always borrows.
Arbitrage works only in the scenario wherein the interest rate purchase parity (IRPT) does not hold good.
The strategy of arbitrage is best explained as "Buy at low price and sell at a high price".
It would be easier to expand your first text box if you don't want to take the risk of lumping everything together. Move your work to one text box and expand it so it all fits.
Answer:
d. 1.753 pesos/krone
Explanation:
The computation of the received pesos for exchange is shown below
Received pesos = Exchange value of one U.S dollar for Mexican pesos ÷ Exchange value of one U.S dollar for Mexican pesos
= 10.875 ÷ 6.205
= 1.753 pesos/krone
It shows a relationship between the Exchange value of one U.S dollar for Mexican pesos and the Exchange value of one U.S dollar for Mexican pesos so that per pesos/krone can come
Answer:
The answers are:
A) total interest = p x r x t
where:
- p = $9,200
- r = 10%
- t = 2 years
total interest = $9,200 x 10% x 2 = $1,840
B) the total cost of the car = down payment + principal + total interest
total cost = $2,300 + $9,200 + $1,840 = $13,340
C) monthly payment = (principal + total interest) / total number of payments
monthly payment = ($9,200 + $1,840) / (12 x 2) = $11,040 / 24 = $460
D) APR = (total payments x total interest) / [principal x (total payments +1)]
APR = (24 x $1,840) / ($9,200 x 25) = 0.192 or 19.2%
