Answer:
B. A dynamic and complex environment
Explanation:
Answer: $88289.8
Explanation:
Here's the complete question:
As part of her retirement planning, Mrs. Campbell purchases an annuity that pays 9.5% compounded quarterly. If the quarterly payment is $3,500, how much will Mrs. Campbell have saved in 5 years?
The future value of an annuity will be calculated using the formula:
= A((1+r)^n)-1)/r
Where,
A = the annuity payment = 3500
r = the interest rate = 9.5% compounded quarterly = 9.5% / 4 = 0.095 / 4 = 0.2375
n = the number of time periods = 4 × 5 = 20
We then substitute the values and we will get:
= A((1+r)^n)-1)/r
= 3000 × (1.02375^20-1) / 0.02375
= $88289.8
Answer:
B. 16.50%
Explanation:
We know,
according to Capital Asset Pricing Model (CAPM), the expected return, E(r) = risk-free rate + (expected return on the market - risk-free rate) × beta
Given,
Risk-free rate = 2.50%
Expected return on the market = 9.5%
Beta = 2 (We know market beta is 1. As Metz Industries stock twice as risky as the market on average, the beta of the company is 1×2 = 2.)
Putting the values in to the formula, we can get,
The expected return, E(r) = 2.50% + (9.5%- 2.50%) × 2
E(r) = 2.50% + 7% × 2
E(r) = 2.50% + 14%
E(r) = 16.5%
Therefore, the option B is the answer.
Answer: A = 9 and firm B = 0.11
Explanation:
Debt to equity ratio = Total Liability/ total equity
Firm A = 18000000 / 2000000
Debt to equity ratio of firm A = 9
Firm B = 2000000 / 18000000
Debt to equity ratio of firm B = 0.11
