Answer:
1. $100,000 and 25%
2. $137,200 and 34.3%
3. $150,000 and 27%
Explanation:
1. It does not expand
a. Net income= $100,000 (as given in the question)
b. Return on equity= (net income)/(shareholder’s equity)
Shareholder’s equity= $400,000
Thus return on equity= 100000/400000 = 0.25 or 25%
2. It expands and issue $160,000 in debt
a. Net income= $100000 + 50000 – 12800 (debt interest 8% of $160000)
= $137,200
b. Return on equity= (net income)/(shareholder’s equity)
= 137200/400000
=0.343 or 34.3%
3. It expands and raises equity of $160000
a. Net Income= $100000 + 50000
= $150000
b. Return on equity= (net income)/(shareholder’s equity)
= 150000/(400000 + 160000)
Where ($560,000) 400000 + 160000 is shareholder’s equity
= 0.27 or 27%
To bet , play games for money , risky .
Answer:
Intrinsic value is $114.30
Explanation:
Given:
Dividend paid = $8
Required rate of return = 7% or 0.07
There is no growth in dividends.
Calculate price of preferred share using DDM as shown below:
Price of preferred share = Dividend paid ÷ Required rate of return
= 8 ÷ 0.07
= $114.28 or $114.3
Therefore, price of preferred share is $114.30
Answer:
the stock value per share is $42.86
Explanation:
The computation of the stock value per share is shown below
But before that firm value is
= ($150,000,000) ÷ (12% - 5%)
= $2,142,857,142.86
Now the stock value per share is
= Firm value ÷ number of shares of stock outstanding
= $2,142,857,142.86 ÷ 50,000,000
= $42.86 per share
Hence, the stock value per share is $42.86
Answer:
Hi
The insurance company should not pay as it is explained that the insurance policy did not cover against vandalism or theft, and a fire is the product of an act of vandalism.
Explanation:
To avoid this type of problem, there are the multi-risk policies of the home, which offer coverage for damages due to vandalism, to cover the damages caused by malicious intent by third parties. This coverage usually includes damages caused by people other than the policyholder, their relatives, employees or people living in the insured home. Some insurers include damages caused by tumultuarial actions in activities of meetings or demonstrations, as well as the existence of legal strikes, unless the aforementioned actions had the character of a mutiny or popular uproar. But we must consider that not all vandalism situations are covered by insurance, and situations such as graffiti, inscriptions, graffiti drawings are usually not covered, but depend on each specific policy.
