What is true about investment and risk

Scott Lockhart owns and operates AAA Delivery Services. On January 1, 20Y7, Common Stock had a balance of $60,000, and Retained

inessss [21]

Answer:

Explanation:

The stockholder's equity statement is composed of common stock and retained earnings. The ending balance shown in the attached spreadsheet, after modification.

The Ending balance of earnings retained = Starting balance of earnings retained + net income - dividend paid

And, Ending balance of common stock = Starting balance of common stock + issued stock

The preparation of the stockholders ' equity statement for the year ended December 31, 20Y7 is provided in the spreadsheet. The attachment below is:

7 0

3 years ago

Company ABC has an existing debt of 2,000,000 on which it makes annual payments at an annual effective rate of LIBOR plus 0.5%.

Degger [83]

Answer:

$70,000

Explanation:

Calculation to determine the net interest payment that ABC makes in the second year

First step is to calculate interest payments on the existing debt

Interest payments on the existing debt =$2,000,000*(4.0%+.5%)

Interest payments on the existing debt =$2,000,000*4.5%

Interest payments on the existing debt =$90,000

Second step is to calculate the Fixed Payment

Fixed Payment=$2,000,000*3%

Fixed Payment=$60,000

Third step is to calculate the amount received

from swap counterparty

Amount received =$2,000,000*4%

Amount received =$80,000

Now let calculate the net interest payment

Net Interest payment=$60,000+($90,000-$80,000)

Net Interest payment=$60,000+$10,000

Net Interest payment=$70,000

Therefore the net interest payment that ABC makes in the second year is $70,000

6 0

3 years ago

A stock has an expected return of 16.1 percent, the risk-free rate is 6.45 percent, and the market risk premium is 7.2 percent.

DiKsa [7]

Answer:

the beta of the stock is 1.34

Explanation:

The calculation of the beta of the stock should be

As we know that

Expected rate of return = Risk free rate + beta × market risk premium

16.1 = 6.45% + beta × 7.2%

16.1% - 6.45% = beta × 7.2%

9.65% = beta × 7.2%

So, the beta should be

= 9.65% ÷ 7.2%

= 1.34

Hence, the beta of the stock is 1.34

4 0

3 years ago

When converting units, summarize the steps using the Direct Method

omeli [17]

Summary of the steps of converting units, using the Direct Method-

Unit conversion is a multi-step manner that includes multiplication or division by using a numerical component, selection of an appropriate wide variety of great digits, and rounding.
This multi-step process is provided in , which includes a rounding method for technical files, specs, and different applications such packaged items in the industrial market and temperature.

<u>Unit Conversion Process</u>

This method uses the reality that any variety or expression may be expanded with the aid of "one" with out changing its price. This allows the conversion of gadgets via multiplying the initial size with the aid of one (or extra) sorts of the #1. even as the multiplication via 1 does not exchange the fee of the dimension, it does change the size units.

It’s very easy to systematically apply unit conversion process to solve conversions within or between measurement systems.

Step 1. Identify the unit you have. These are the Starting Units.

Step 2. Identify the unit you want. These are the Desired Units.

Step 3. Identify appropriate unit conversion factor(s).

Step 4. Cancel units and perform the math calculations (e.g., multiply, divide). Repeat the calculation (double check).

Step 5. Evaluate the result.

Learn more about Unit brainly.com/question/19244145

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3 0

2 years ago

Explain why, in the absence of a patent, a technical innovation invented and pioneered in one tofu factory will cause the supply

Pavlova-9 [17]

Answer:

We should start by assuming that before the technological break through is made, the tofu industry is at equilibrium. The new technology will result in the production costs of tofu decreasing, which will shift the supply curve to the right. At first, production costs of just the innovative firm will decrease, but eventually other firms will catch up with the new technology. In the short run, the innovative firm will be able to make an economic profit since the industry will not have reached equilibrium. But after a while, as more firms adopt the new technology, equilibrium will be reached and economic profit will disappear (halting the rightward shift).

If the government grants a patent to the innovative firm that developed the new technology, then a monopoly might result. This is something similar to monopolies resulting from patents in the pharmaceutical industry. The profits of this specific company will increase, resulting in economic profit. Governments hand out patents as a way to reward innovation and encourage it. Imagine if patents didn't exist, how many companies would invest billions in R&D if they know that their competition will use that research for free?

When patents are granted, prices increase, and consumer surplus decreases.

4 0

3 years ago