Answer:
B. 9.84%
Explanation:
Given that
D1 = 1.25
P0 = 27.50
g = 5%
F = 6%
Recall that
Cost of equity raised = (D1/P0 - [F × P0]) + g
Thus,
= 1.25/27.50 - [0.06 × 27.50] + 0.05
= 1.25/ 25.85 + 0.05
= 0.04835 + 0.05
= 0.09835
= 0.0984
=9.84%
Answer:
C. Father and his 35-year-old son investing in separate account.
Explanation:
Quantity discount when offered relates to one particular account, and not multiple accounts at a time.
In a transaction joint accounts are called as single person where there is only one main account in consideration and no secondary account exists for the same.
As in the given options,
Option A of husband and wife investing in a joint account means a single account is made of which both the husband and wife are controllers.
Option B is of UTMA account which is made for the benefit of the minor child, although involves two people that is parent and child, but is run individually by the parent and is a single account.
Further Option C provides for separate investment accounts , which means two different accounts and therefore are completely different one of father and another of son, thus do not qualify of quantity discount jointly, either of the one account can claim the quantity discount as a person.
Answer: 88.89 or 89
Explanation: Futures contract refers to a legal binding which obligates a buyer and seller to transact about a commodity, good, security or services at a predetermined price but goods are delivered or paid for in the future.
Given the following ;
Portfolio value(p) = $20million
Portfolio Beta (b) = 1.2
Index price (i) = 1080
Multiplier = 250
Future value(A) = index price × multiplier
Future value(A) = 1080 × 250 = 270000
Number of contracts (N) = (portfolio value × portfolio Beta) ÷ future value
N = ($20,000,000×1.2)÷270000
N = 24000000 ÷×270000
N = 88.8888=88.89
N = 89 (NEAREST whole number)
Answer:
Amount to be paid annually by Ned Winslow = $8461.35
Explanation:
Fv = <u>A ( 1 + r)∧n - 1 </u>
r
90,000 = <u>A ( 1 + 0.08)∧8 - 1</u>
0.08
90,000 = <u>A ( 1.8509 - 1)</u>
0.08
90,000 = 10.6366A
A = 90,000/10.6366
= $8,461.35
Answer:
I'm not sure what this question is about, but the concept of the income expenditures model and its components is the following:
In the income (or aggregate) expenditures model, its author (Keynes) established certain assumptions in order to analyze how the economy works as a whole. His assumptions included that investment, government spending and net exports were all independent from income level.
When the economy is at equilibrium, total expenditures (GDP) = income level = consumption + government + investment + net exports
Another important assumptions are:
- marginal propensity to consume (MPC) + marginal propensity to save (MPS) = 1
- consumption = autonomous consumption + [MPC x (total income level - taxes)]
Savings = investment increase when disposable income increases or real GDP increases.
This model is used to explain the relationship between labor and production levels, and how they are affected by the economy's total expenditures. By increasing expenditures, the demand for labor and products/services will increase.
