Answer:
16.74%
Explanation:
Current Price = Expected Dividend / (Required Return - Growth Rate)
Required Return = (Expected Dividend / Current Price) + Growth rate
Required Return = ($5.05 / $43) + 5%
Required Return = 0.1174419 + 0.05
Required Return = 0.1674419
Required Return = 16.74%
In the product markets of the circular flow model, households provide <u>Consumption Spending (or Revenues) </u>to the business sector in exchange for goods and services.
Consumer spending is the total amount of the money spent by people and families in an economy on finished goods and services for their own use and enjoyment. All private purchases of durable, nondurable, and service products are included in modern measurements of consumer spending.
To help estimate and plan investment and policy decisions, investors, corporations, and regulators regularly monitor published statistics and reports on consumer spending.
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Answer:
-5.14 for sam
-18.01% for dave
Explanation:
We first calculate for Sam
R = 7.3%
We have 2% increase
= 9.3%
We calculate for present value of coupon and present value at maturity using the formula for present value in the attachment
To get C
1000 x 0.073/2
= 36.5
time= 3 years x 2 times payment = 6
Ytm = rate = 9.3%/2 = 0.0465
Putting values into the formula
36.5[1-(1+0.0465)^-6/0.0465]
= 36.5(1-0.7613/0.0465)
36.5(0.2385/0.0465)
= 36.5 x 5.129
Present value of coupon = 187.20
We solve for maturity
M = 1000
T = 6 months
R = 0.0465
1000/(1+0.0465)⁶
= 1000/1.3135
Present value = 761.32
We add up the value of present value at maturity and that at coupon
761.32 + 187.20
= $948.52
Change in % = 948.52/1000 - 1
= -0.05148
= -5.14 for sam
We calculate for Dave
He has 20 years and payment is two times yearly
= 20x2 = 40
36.5 [1-(1+0.0465)^-40/0.0465]
Present value = 36.5 x 18.014
= 657.511
At maturity,
Present value = 1000/(1+0.0465)⁴⁰
= 1000/6.1598
= 162.34
We add up these present values
= 657.511+162.34 = $819.851
Change = 819.851/1000 -1
= -0.1801
= -18.01%
Answer:
The balance in ABC's Prepaid insurance-account as on Dec 31, 2018 is <em>$27,000</em>
Explanation:
Liability policy = ($54,000 / 18) × 6 months
Liability policy = $18,000
Crop damage policy = ($18,000 x 12 / 24)
Crop damage policy = $9,000
ABC's Prepaid insurance-account balance as on Dec 31, 2018 = $27,000
Thus,
Total Liability insurance period = 18
Now,
Expired period period - 12 months ( Jan 1, 2016 to Dec 31, 2016 )
Unexpired period = (18 - 12) months = 6 months