There are different types of investment. The type of investment would be an example of an investment at point B is a stock.
When you look at the graph, you will see a rise from point A to both B. With this, you can know that the asset class that has highest risk and also has the highest return is a stock.
There are different kinds of investments. They includes stocks, real estate, etc. The intention of the buyer is that they will increase the value of their savings/money over time.
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Answer:
Detaled solution can be seen in the attached diagrams:
They will either match the prices of another offer or go lower then the offer
Answer:
Cost of equity capital can be found by the Capital asset pricing model:
Cost of capital
= Risk free rate + beta * market premium
= 2% + 0.8 * 10%
= 10%
Weighted Average Cost of Capital:
= (weight of debt * after tax cost of debt) + (weight of stock * cost of stock)
= (50% * 8% * ( 1 - 34%)) + (50% * 10%)
= 10.28%
Answer:
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Explanation:
The question requires to calculate the annual percentage growth rate assuming it was constant.
The final earnings are equal to the initial earnings multiplied by 1 + the growth rate, raised to the number of periods.
Here:
- initial earnings = $0.50
- final earnings = $5.00
- number of periods = 10 years
Then, your equation is:
- $5.00 = $0.50 (1 + rate)¹⁰
Solving, you get:
Thus, the answer is the option b. 25.89%
