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3 years ago

Which of the following statements is CORRECT?

1 answer:

6 0

Answer: The market value of an option depends in part on the option's time to maturity and on the variability of the underlying stock's price

Explanation:

The value of an option is made up of the time premium plus the intrinsic value of the option. When risk free rate rises, the price of a call option also rises.

It should be noted that the current value of the option trade is dependent on the price that one paid, and the underlying stock price.

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alex has to pay his car insurance twice a year. each payment is $312. how much money should alex budget for his insurance each m

SSSSS [86.1K]

This person should budget 52 dollars.

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3 years ago

A publisher faces the following demand schedule for the next novel from one of its popular authors:

enyata [817]

Answer and Explanation:

The completion of the second, fourth, and fifth columns of the given table is to be shown in the attachment below:

As we know that

Profit = Total revenue - total cost

Total revenue is the revenue earned by the company by multiplying the price with the quantity demanded

While the total cost is

= Fixed cost + variable cost

The marginal revenue comes from

= Change in total revenue ÷ change in quantity

We simply use these formulas in the spreadsheet below.

4 0

2 years ago

At December 31, 2018, Oriole Company reported the following information on its balance sheet.

drek231 [11]

Answer:

Bad debt expense (Dr.) $68,930

Allowance for Doubtful Debt (Cr.) $68,930

Explanation:

Accounts Receivable :

Balance $948,000

Add: Sales $3,609,930

Less: Sales returns $51,000

Less: Collections $2,756,000

Less: Write offs $97,000

Add: Recovery of old Bad debts $28,000

Adjusted Balance $1,653,930

Bad Debts :

Balance $78,000

Less: Allowance for doubtful debts $97,000

Less: Recovery $28,000

Adjusted Balance $9,000

7 0

2 years ago

You have a $15,000 portfolio which is invested in Stocks A and B, and a risk-free asset. $6,000 is invested in Stock A. Stock A

DerKrebs [107]

Answer:

$7073.68

Explanation:

Data provided in the question:

Worth of portfolio = $15,000

Amount invested in stock A = $6,000

Beta of stock A = 1.63

Beta of stock B = 0.95

Beta of portfolio = 1.10

Now,

Beta portfolio = ∑(Weight × Beta)

let the amount invested in Stock B be 'x'

thus,

1.10 = [($6,000 ÷ $15,000 ) × 1.63] + [( x ÷ $15,000 ) × 0.95 ]

1.10 = 0.652 + [( x ÷ $15,000 ) × 0.95 ]

0.448 = [( x ÷ $15,000 ) × 0.95 ]

x = ( 0.448 × $15,000 ) ÷ 0.95

x = $7073.68

6 0

2 years ago

Golden Eye Co., a hi-tech satellite company, has asked you to value the company for possible cross-listing in the U.S. The compa

EastWind [94]

Answer:

Explanation:

Let's first determine the free cash flow of the firm

Particulars Years

1 2 3

EBIT 540 680 750

Tax at 36% (0.36*540) (0.36*680) (0.36*750)

Less: 345.6 435.2 480

Net Capital -

Spending 150 170 190

Change in NWC 70 75 80

Less: 125.6 190.2 210

The terminal value at the end of T =(3 years) is:

$= \dfrac{Free \ cash \ flow}{unlevered \ cost - expected \ growth \ rate}$

$= \dfrac{250}{0.1643-0.04}$

$= \dfrac{250}{0.1243}$

= 2011.26

Finally, the value of the firm can be computed as follows:

Years Free Cash Flow PVIF PV

1 125.6 0.6589 107.88

2 190.2 0.7377 140.31

3 210 0.6336 133.06

Terminal Value 2011.26 0.6336 1294.33

Value of the firm ⇒ $1655.58

5 0

2 years ago