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kompoz [17]
1 year ago
11

You are bullish on Telecom stock. The current market price is $40 per share, and you have $8,000 of your own to invest. You borr

ow an additional $8,000 from your broker at an interest rate of 4.0% per year and invest $16,000 in the stock.
Required:

a. What will be your rate of return if the price of Telecom stock goes up by 6% during the next year? (Ignore the expected dividend.) (Round your answer to 2 decimal places.)
Business
1 answer:
Marrrta [24]1 year ago
7 0

The rate of return if the price of Telecom stock goes up by 6% during the next year is 8.00%

What is rate of return?

The rate of return on the bullish strategy is the return on the stock minus the interest on the borrowing.

The share price increase of 6% means the total amount invested would increase by 6%

new value of investment=$16000*(1+6%)

new value of investment=$16,960

interest on borrowing=4%*$8000

interest on borrowing=$320

Gain on investment=new value of investment-initial investment-interest on borrowing

Gain on investment=$16,960-$16,000-$320

Gain on investment=$640

rate of return=gain on investment/equity investment

rate of return=$640/$8000

rate of return=8.00%

Find out more about rate of return on:brainly.com/question/18716615

#SPJ1

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A company produces and sells 6,400 recliners each year. Each production run has a fixed cost of $400 and an additional cost of $
Taya2010 [7]

Answer:

800 Recliners

Explanation:

Calculation for the optimal number of recliners the company should make during each production run

Using this formula

Economic Order Quantity (EOQ) =√ [(2 D x S) / C]

Where,

Annual Demand (D) = 6,400 Recliners

Fixed Ordering Cost (S) = $400

Carrying cost per recliner (C) = $8

Let plug in the formula

Economic Order Quantity (EOQ)= √[(2 x 6,400 x $400) / $8]

Economic Order Quantity (EOQ)=√$5,120,000/$8

Economic Order Quantity (EOQ)=√$640,000

Economic Order Quantity (EOQ)= 800 Recliners

Therefore the optimal number of recliners the company should make during each production run will be 800 Recliners

8 0
2 years ago
Special Forces is a unique division of the U.S. military. These highly trained individuals work in teams and often plan their ow
Mama L [17]

Answer:

The correct answer is:  controlling.

Explanation:

The controlling function in management helps to measure progress towards the organizational goals and brings with it any variations to indicate corrective action. It is a useful tool that allows organizations to verify if everything is happening according to the initial plan adopted.

5 0
3 years ago
Taylor is analyzing the effects of wage rates on the supply of laptop computers. By using the ceteris paribus assumption, Taylor
Maru [420]

By using the ceteris paribus assumption, Taylor is holding the

  • holding all costs of production other than the wage rate constant
  • not considering retail price of laptop computers
<h3>What is ceteris paribus?</h3>

Ceteris paribus is a Latin phrase used in economics that means all other things being equal in English. It is used when studying the effect of one variable on another variable to mean that other variables that can affect the variable being studied is assumed to not change.

When Taylor is analyzing the effect of wage rates on the supply of laptop computers. By using the ceteris paribus assumption, he is assuming that other factors that would affect the supply of laptops are assumed to be constant.

The other factors that might affect the  supply of laptop computers include:

  • cost of production
  • retail price of laptops

Here is the complete question:

Taylor is analyzing the effects of wage rates on the supply of laptop computers. By using the ceteris paribus assumption, Taylor is __________.

Select the two correct answers below.

Select all that apply:

holding the supply of laptop computers constant

holding all costs of production other than the wage rate constant

holding wage rates constant

not considering retail price of laptop computers

To learn more about ceteris paribus, please check: brainly.com/question/13864080

#SPJ1

7 0
1 year ago
Financial functions format calculated values as currency, with _______. Question 3 options: a) positive cash flow appearing in r
Vlada [557]

Answer:

d) negative cash flow appearing in red font.

Explanation:

Colour coding is a type of excel formatting for financial modelling.

Color coding allows anyone to immediately pick up your model and know what can be changed (assumptions) and what should not be altered (formulas).

Example:

negative cash flow (Cash outflow) of the company appears in red font while positive cash flow (Cash inflow) of the company appears in green font.

3 0
3 years ago
In addition to​ risk-free securities, you are currently invested in the Tanglewood​ Fund, a​ broad-based fund of stocks and othe
Murrr4er [49]

Answer:  6.29%

Explanation:

Required return = Risk free rate + beta ( expected return - risk free rate)

Beta.

= Correlation * \frac{Volatility of venture}{Volatility of fund} \\\\= 0.16 * \frac{0.8117}{0.2636} \\\\= 0.493

Required return = 3.63% + 0.493(9.03% - 3.63%)

= 6.29%

7 0
3 years ago
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