The effective compound interest rate is 13.87%.
<h3><u>
What is Compound Interest?</u></h3>
- The interest on a loan or deposit that is calculated based on both the initial principle and the accumulated interest from prior periods is known as compound interest (also known as compounding interest).
- Compound interest, sometimes known as "interest on interest," is said to have its roots in 17th-century Italy. Compared to simple interest, which is calculated solely on the principal amount, it will cause a sum to grow more quickly.
- The frequency of compounding determines the rate at which compound interest accumulates.
- The compound interest increases with the number of compounding periods.
- For instance, during the same period of time, the amount of compound interest accrued on $100 compounded at 10% yearly will be less than $100 compounded at 5% semi-annually.
Nominal = interest rate
That is Nominal rate is also known as interest rate.
Nominal rate = 13.20%
The invested money is compounded quarterly.
Periodic = 13.2%/4 (quarterly)
Periodic rate = 3.30%
Now,
The interest rate that accounts for compounding over a specific time period is called the Effective Annual Interest Rate (EAR). The rate of interest that an investor can earn (or pay) in a year after taking into account compounding is known as the effective annual interest rate, to put it simply.
Effective annual rate = EFF% = [1 + (0.13200 / 4)]⁴ - 1 = 13.87%
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Answer:
Option (C) is correct.
Explanation:
We have to use MM proposition that cost of equity will change itself in such a manner so that it can take care of its debt.
Cost of equity:
= WACC of all equity firm + (WACC of all equity - Cost of debt ) × (Debt -to-equity ratio)
At the beginning, when there was no debt,
WACC = cost of equity = 12 %
Levered cost of equity:
= 12% + ( 12% - 6%) × 0.5
= 15%
Therefore, Rearden's levered cost of equity would be closest to 15%.
Answer:
Cumulative voting
Explanation:
Cumulative voting - in this type of voting system sole right is given to shareholder who is in minority to elect their director. this system permit shareholder to cast all their vote for any single nominee for board of directors.
while in regular voting system no permission is granted to anyone to cast more than one vote.
example - for four member and 500 holding share , maximum vote than can cast is 500 (one vote for one share) in normal voting but in cumulative maximum that can cast is 2000 votes
After being recently promoted as a project manager for a new project with a new team, Suzanna must develop trust and establish the work rules by the way of interacting personally with her new team members.
<h3>Who is a project manager?</h3>
A person who is engaged or involved in planning, allocating and finishing a project for an organization, which is a part of the organizational goals, such a person is known as a project manager.
Hence, the significance of a project manager is aforementioned.
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Answer:
40%
Explanation:
The Dean company have a sales of $500,000
The break-even point in sales dollar is $300,000
Therefore, the company's margin of safety can be calculated as follows
Margin of safety= Sales-break-even sales/sales
= $500,000-$300,000/$500,000
= $200,000/$500,000
= 0.4×100
= 40%
Hencethe company's margin of safety percentage is 40%
