Answer:
2 cents
Explanation:
The spot price = $0.7000 = 70 cents, The forward rate = $0.6950 = 69.5 cents and the call option with striking price = $0.6800 = 68.00 cents
The annualized six month rate = 3 1/2 % = 3.5 %, therefore the rate = r/n, where n is the number of period per year = 2. Therefore r/n = 3.5% / 2 = 0.035 / 2 = 0.0175
The minimum price = Maximum (spot price - striking price, (forward rate - striking price) / (1 + 0.0175), 0) = Maximum(70 - 68, (69.5 - 68)/ 0.0175, 0)
Minimum price = Maximum (2 , 1.47, 0) = 2 cents
Answer:
Correct answer is 1.28
Explanation:
Investment in Y=(100,000-72500)=$27500
Portfolio beta=Respective betas*Respective investment weights
=(72500/100,000*1.5)+(27500/100,000*0.70)
=1.28
Answer:
$585,000
Explanation:
Given that
Prime costs = $960,000
Conversion costs = $980,000.
Overhead costs = 150% of direct labor costs.
As we know that
Prime costs = Direct material cost + Direct labor cost
So,
Direct material cost + Direct labor cost = $960,000
And,
Conversion costs = Direct labor cost + Manufacturing overhead.
$980,000 = Direct labor cost + 150% of direct labor.
2.5 direct labor cost = $980,000
Direct labor cost = $980,000 ÷ 2.5
= $392,000
So,
Manufacturing overhead is
= $392,000 × 150%
= $585,000
Answer:
A) 1.2
B) 10.15%
Explanation:
See the below images to get the answer:
Answer:
The percentage of the firm that is financed by debt is:
40%
= $2 ($5 - $3) million/$5 million
= 40%
Explanation:
The long-term debt financing is the difference between the total assets of the firm and the value of the firm's equity. The debts/assets ratio is the financial leverage that the firm employs in running the business. The implication is that creditors can lay claim to 40% of the assets of the firm since the assets are financed 40% from debts. The remaining 60% is financed by Stockholders' Equity.