Answer:
They should not be able to successfully negotiate the terms of this loan within these parameters.
Explanation:
It has been provided that RT earns 12% on his current investments and would not like to receive an interest rate of less than 12% on the loan he gives.
if RT gives a loan of $10,000 for one year, he would charge an interest rate of minimum 12%.
Interest = $10,000*0.12
= $1,200
RT requires $1,200 in interest.
It has been provided that Cynthia earns 8% on her investment.
If she borrows $10,000 and invests the amount for one year, she can earn 8% return on such amount.
Earning = $10,000*0.08
= $800
Cynthia is going to earn $800
RT requires a minimum of $1,200 as interest for 1-year loan he gives while Cynthia can pay a maximum of $10,000 as interest for 1-year loan she takes. there is mismatch between the minimum expectation to receive of lender and the maximum expectation to pay of borrower.
Therefore, They should not be able to successfully negotiate the terms of this loan within these parameters.
Answer:
The value of the stock today is $20
Explanation:
Using the CAPM equation, we first calculate the required rate of retunr on the stock.
The equation for CAPM is,
r = rRF + Beta * rpM
Where,
- rRF is the risk free rate
- rpM is the risk premium on market
- Beta * rpM is the risk premium on stock
r = 0.05 + 0.04
r = 0.09 or 9%
The value of the stock can be calculated using the zero growth model of DDM. The DDM values the stock based on the present value of the expected future dividends from the stock. As the dividend from the stock is expected to remain constant through out to an indefinite period, the value of the stock today is,
P0 = Dividend / r
P0 = 1.8 / 0.09
P0 = $20
Yes. Collective bargaining is negotiation of wages working conditions by an organized group of employees (often called a union). The union representatives meet with the employer/employer's representatives to negotiate terms.
Answer:
equal to the british interest rate
Explanation:
Data provided in the question
The Interest rate on these securities = 12%
In the U.S, the interest rate = 10%
Also the spot rate for today would become suitable for the spot rate
Based on the above information, the effective yield on the british securities would be equivalent to the british interest rate and hence the same is to be considered
This shorter payback period is positive and beneficial to the consumer, as it allows for harmony with amortization expenses.
We can arrive at this answer because:
- A short payback period is beneficial because of its relationship to amortization, as long-term debt allows this amortization to take place.
- These amortization expenses allow the cost of long-term assets to be represented in the payment.
- However, when the short-term payback period allows for amortization, causing the asset's value to be reduced by the amount that will be paid by the consumer.
In this case, we can state that in cases like the one shown in the question above, the short payback period is very beneficial and interesting to the consumer, as it can promote economic benefits.
More information:
brainly.com/question/23160357?referrer=searchResults
