Answer:
should choose option a
Explanation:
option a)
annuity due, 31 payments of $180,000 per year, 6.25% discount rate
Present value = $180,000 x 14.40432 (PV annuity due factor, 6.25%, 31 periods) = $2,592,726
option b)
$500,000 today + ordinary annuity, 30 periods, 6.25%, $144,000
present value = $500,000 + ($144,000 x 13.40432 [PV annuity factor, 6.25%, 30 periods)] = $2,430,222
Answer:
$8.78
Explanation:
National advertising made dividend payment of $0.75 per share
The dividend is expected to grow at a constant rate of 6.50%
= 6.50/100
= 0.065
The company beta is 1.85
The required return on the market is 10.50%
The risk free rate is 4.50%
The first step is to calculate the rate of return using the CAMP model
R = Risk free rate+beta(market return-risk free rate)
= 4.50%+1.85(10.50%-4.50%)
= 4.50%+1.85×6%
= 4.50%+11.1
= 15.6
Required rate of return= 15.6
Therefore the current stock price can be calculated as follows
Po= Do(1+g)/(r-g)
Where Do= 0.75, g= 0.065, r= 15.6
Po= 0.75(1+0.065)/(0.156-0.065)
Po= 0.75(1.065)/0.091
Po= 0.7987/0.091
Po= $8.78
Hence the company current stock price is $8.78
Answer:
The answer is 
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Explanation:
![\to [\$500,000 (\frac{1}{3} \times \$1,500,000) + \$250,000 (\frac{1}[3} \times \$750,000 + \$450,000 (\frac{1}[2} \times \$900,000]\\\\\\to \$1,200,000](https://tex.z-dn.net/?f=%5Cto%20%5B%5C%24500%2C000%20%28%5Cfrac%7B1%7D%7B3%7D%20%5Ctimes%20%5C%241%2C500%2C000%29%20%2B%20%5C%24250%2C000%20%28%5Cfrac%7B1%7D%5B3%7D%20%20%5Ctimes%20%5C%24750%2C000%20%2B%20%5C%24450%2C000%20%28%5Cfrac%7B1%7D%5B2%7D%20%20%5Ctimes%20%5C%24900%2C000%5D%5C%5C%5C%5C%5C%5Cto%20%5C%241%2C200%2C000)
Though this tree farm is jointly held, Aiden is assumed to have given 1/3 of the treatment because his mother gave her a gift to create the lease. The tenancy of the major chunk is subjected to the fifty percent spouse exclusion rule. None of the structures is included as Chloe does not escape Aiden.
Answer:
Market value of stock A = 20 shares x $10 = $200
Market value of stock B = 15 shares x $3 = $45
Market value of stock C = 10 shares x $5 = $50
Total market value $295
Amount to invest in stock A
= $200/$295 x $5,000
= $3,389.83
Explanation:
In this case, we will calculate the market value of each stock by multiplying the number of each stock by their corresponding market prices.
Thereafter, we will divide the market value of stock A by the total market value multiplied by amount available for investment ($5,000).
Answer:
The Money supply will decrease by $4,500
Explanation:
What will be the maximum impact on money supply today as a result of your action is that the Money supply will decrease by $4,500.
Since we assumed that you have $10,000 in your account in which you withdraw $500 cash from your account and hide it under your pillow for future use, therefore based this scenario or actions carried by you it means that your bank have fewer or lesser funds available to make loans which means the decrease will tend to affect the money supply.
Hence, you can easily calculate the effect by using the simple money multiplier.
