The increase in stock risk has lowered its value by 16.09%.
<h3>What does market price mean?</h3>
- The price at which a good or service can currently be bought or sold is known as the market price.
- The forces of supply and demand determine the market price of a good or service; the price at which the quantity supplied and demanded are equal is the market price.
<h3>What is current price and market price?</h3>
- Market value is another name for the current price. It is the last traded price for a share of stock or any other security.
According to the question:
- If the security's correlation coefficient with the market portfolio doubles (with all other variables such as variances unchanged), then beta, and therefore the risk premium, will also double. The current risk premium is: 13% - 5% = 8%
The new risk premium would be 16%, and the new discount rate for the security would be: 16% + 5% = 21%
If the stock pays a constant perpetual dividend, then we know from the original data that the dividend (D) must satisfy the equation for the present value of a perpetuity:
Price = Dividend/Discount rate.
26 = D/0.13.
D =26 x 0.13.
D = $3.38.
At the new discount rate of 21%, the stock would be worth:
$3.38/0.21.
= $16.09.
The increase in stock risk has lowered its value by 16.09%.
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Answer:
The correct answer is Increase in accounts payable and unearned fees.
Explanation:
An account payable consists of a debt incurred by the company directly related to the economic activity of the company. An account payable is a debtor account in a company and indicates that it has to pay its suppliers (or other creditors).
The amounts that are accounted for as accounts payable come from the purchase of goods or services in terms of credit. So, accounts payable are similar to credits with the difference that banks are not involved.
Answer:
$1400
Explanation:
Net working capital is obtained by subtracting total current liabilities from total current assets. Current assets and liabilities are expected to be used or paid within one year.
Change in net working capital would be the change in current assets - change in current liabilities.
last year current assets $67,200 : current liabilities $71,100
This year current assets $82,600 : current liabilities $85,100
change Net operating capital = {$82,600- 67,200} - {85,100 - 71,100}
=$15,400 -14,000= -$1400
Change in networking capital = $1400
Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Windsor, Inc. made three purchases of merchandise in the following sequence:
(1) 400 units at $5,
(2) 500 units at $7
(3) 600 units at $8.
Total units= 1,500
Assuming there are 300 units on hand at the end of the period, compute the cost of the ending inventory.
A) FIFO (first-in, first-out)
Inventory= 300*8= $2,400
B)LIFO (last-in, first-out)
Inventory= 300*5= $1,500
