Answer:
A. Meredith's bank receives a letter of credit from the importer's bank.
Explanation:
Letter of Credit is a written undertaking given by a Bank (importer's bank) at the request of its customer (applicant), in which the Bank obligates itself to pay the exporter (seller/beneficiary) up to a stated amount within a prescribed time frame upon presentation of stipulated documents that conform to the terms and conditions of the documentary credit.
It is a common mode of payment used for the importation of visible goods which served to protect both the importer and exporter against exposure to the risk of default either in payment or delivery of goods.
Answer:
E. Over applied overhead
Explanation:
Over applied overhead is defined as excess amount of overhead applied during a production period over the actual overhead incurred during that period. In other words, it means excess overhead applied to work over the amount of overhead actually incurred.
When this occurs, it is called favourable variance and it is added to the budgeted profit in the end of the accounting period in a financial statement.
<span> he realizes that his risk for developing Retinopathy has also increased
Retinopathy is a medical condition which cause damage to one's retina and affect his/her sensitivity to light.
For a diabetic, a chance to develop this condition is higher because diabetes could contribute in adding the damage to the Blood vessels near the retina.</span>
Answer:
The new price will be $11.89 if the market risk premium falls to 8% changing the required rate of return to 15.6%.
Explanation:
We will calculate the price of the share today using the constant growth model of DDM as the stock's dividends are growing at a constant rate forever. The formula for constant growth model is,
P0 = D0 * (1+g) / (r - g)
Where,
- D0 * (1+g) is the dividend expected for the next period or D1
- r is the required rate of return
- g is the growth rate in dividends
We need to find the new required rate of return. The required rate is unknown and can be calculated using the CAPM. The required rate under CAPM is,
r = rRF + Beta * rpM
r = 0.06 + 1.2 * 0.08 = 0.156 or 15.6%
Plugging in the available values for new r, g and D0 to calculate price today,
P0 = 1.2 * (1 + 0.05) / (0.156 - 0.05)
P0 = $11.886 rounded off to $11.89