Answer:
a. $6,237.
Explanation:
We use the PMT formula i.e shown in the attachment below:
Data provided in the question
Present value = $850,000
Future value = $0
Rate of interest = 8% ÷ 12 months = 0.66666%
NPER = 30 years × 12 months = 360 months
The formula is shown below:
= PMT(Rate;NPER;-PV;FV;type)
The present value come in negative
So, after solving this, the monthly mortgage payment is $6,237
Answer:
Weighted average cost of capital= 5.94%
Explanation:
The cost of debt is the required rate of return payable to investors in the debt instruments of a company. These investors include providers of long term debt finance to the company.
<em>The cost of debt finance can determined by working out the yield to maturity on debt with adjustment for tax. </em>
It is noteworthy that debt finance affords the company a tax savings advantage because interest expense incurred on the use of debt of are tax deductible expense.
After-tax cost of debt = (1- Tax rate) × before-tax cost of debt
Before tax cost of debt = 9%
Tax rate = 34%
<em>Aft</em>er-tax cost of debt = (1-0.34) × 9% = 5.94%
After-tax cost of debt = 5.94%
Weighted average cost of capital= 5.94%
Answer:
Multiple listing.
Explanation:
An arrangement in which brokers pool their listings and all commissions are divided between the listing broker and the selling broker is referred to as a multiple listing.
A multiple listing is a service used by a group of real estate brokers to formulate contractual offers of compensation and share informations about their various listings of property for sale, so as to enhance appraisals (commissions).
Answer:
Explanation:
Keynesian Economics focuses on using active government policy to manage aggregate demand in order to address or prevent economic recessions.
Keynes developed his theories in response to the Great Depression, and was highly critical of classical economic arguments that natural economic forces and incentives would be sufficient to help the economy recover.
Activist fiscal and monetary policy are the primary tools recommended by Keynesian economists to manage the economy and fight unemployment.
Answer:
b. Purple Hedgehog Forestry's annual dividend will be greater if it goes forward with this decision.
Explanation:
In any company, interests on debts must be paid before dividend is paid. This implies that the higher the amount of debt, the will be the interest on debt to pay; and the lower will be the amount that will be left to pay dividend assuming that all other factors are held constant. Also, the lower the amount of debt, the lower will be the interest on debt to pay; and the greater will be the amount that will be left to pay dividend assuming that all other factors are held constant.
Based on the above explanation, Purple Hedgehog Forestry's annual dividend will be greater if it goes forward with this decision.