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3 years ago

If the federal reserve conducts an open-market purchase, bank reserves _ and the money supply _

1 answer:

6 0

If the federal reserve conducts an open market purchase, bank reserve DECREASE and the money supply INCREASE. The federal reserve has the responsibility to control the amount of money available in the economy. When the federal reserve make a purchase, their reserve will decrease, the money supply in the economy will increase, interest rates will fall and investment spending will increase.

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Suppose Stark Ltd. just issued a dividend of $2.24 per share on its common stock. The company paid dividends of $1.80, $1.98, $2

Sergeu [11.5K]

Answer:

Ans, The cost of the company’s cost of equity capital using the arithmetic average growth rate is 10.63% and using the geometric average of the growth rate is 10.60%

Explanation:

Hi, this is the equation we need to solve in order to find the company’s cost of equity capital.

$r=\frac{Dividend}{Price} +g$

As you can see, we almost have everything, the only problem here is "g", its growth rate, so let´s find "g" using the arithmetic average, but first, we need to find the growth rate for every period, the formula is

$g=\frac{(FinalDividend-PastDividend}{PastDividend}$

Therefore, we need to find 4 g´s, let´s call them g1, g2, g3 and g4:

$g1=\frac{(1.98-1.80)}{1.80} =0.10$

$g2=\frac{(2.05-1.98)}{1.98} =0.0354$

$g3=\frac{(2.16-2.05)}{2.05} =0.0537$

$g4=\frac{(2.24-2.16)}{2.16} =0.0370$

So the average is:

$Average(g)=\frac{0.10+0.0354+0.0537+0.0370}{4} =0.0565$

Therefore, the average growth rate is 5.65%

And the company’s cost of equity is:

$r=\frac{2.24}{45} +0.0565=0.1063$

so, if the average growth rate is found by using the arithmetic average is 10.63%.

Now, let´s find the geometric average

$g(average)=\sqrt[4]{(1+0.10)(1+0.0354)(1+0.0537)(1+0.0370)} -1=0.0562$

therefore, using the geometric average to find the growth rate, the company’s cost of equity is:

$r=\frac{2.24}{45} +0.0562=0.1060$

using the geometric average, the company’s cost of equity is 10.60%

Best of luck.

7 0

2 years ago

Which of the following is an important principle for effectively interacting with the audience during presentations? Multiple Ch

n200080 [17]

Answer: Give short responses, as they are more effective.

i really wouldn't try to use any of these choices though. I would really like to get the audience's attention so I would answer there questions but I would also ask the audience what they think I should do to improve via presentation to the audience to peak their interest.

Explanation: None of these are really a good strategy for interacting with the audience in an effective way, but if this is the only thing provided for you, I would go for giving short responses.

4 0

3 years ago

How does the format of a memo differ from that of an e-mail? please answer asap

aivan3 [116]

Answer: Memos omit a closing signature.

(I took the test and this was the answer)

5 0

2 years ago

The reporting of net cash provided or used by operating activities that lists the major items of operating cash receipts, such a

Olenka [21]

Answer:

Explanation:

‘Cash Flow Statement’ is one of major financial statement that indicates the inflow and outflow of cash along with the reasons by categorizing each cash transaction in three activities i.e., operating, investing or financing activity. Non-cash transactions are not considered while preparing a cash flow statement.

Operating Activities records the cash transactions involved in the operations of the business are recorded under ‘operating activities’ in the cash flow statement.

Examples: Revenue earned, expenses incurred etc.

There are two methods to prepare the cash flow statement. The only difference between both the methods is the way of presenting cash flow from operating activities.

The two methods of presenting cash flow statement are:

Direct method: Operating activities section under direct method reports the amount of cash received and paid by the company during the period.
Indirect method: Operating activities section under indirect method reports the net income and later adjusts the transactions to convert it to cash basis of accounting.

3 0

3 years ago

A fee paid by a borrower to the lender for the use of borrowed money

Stolb23 [73]

A fee paid by a borrower to the lender for the use of borrowed money; typically interest is calculated as a percentage of the principal (original loan amount). A debt evidenced by a "note," which specifies the principal amount, interest rate and date of repayment.

5 0

2 years ago

If the federal reserve conducts an open-market purchase, bank reserves _____ and the money supply _____

If the federal reserve conducts an open-market purchase, bank reserves _ and the money supply _