Answer:
Percentage of total return on Investment = <em>ROI = 17% </em>
Explanation:
Let’s
ROI = Return on Investment = ?
D = Dividends = $15
CGD = Capital Gain Distributions = $35
CGS = Capital Gain on Sale = $120
SP = Shares Purchased = 100
CS = Cost per share = $10.00
ROI = (D + CGD + CGS) / (SP * CS)
ROI = ($15 + $35 + $120) / (100 * $10.00)
ROI = 170 / 1,000
ROI = 0.17
Percentage: 0.170 x 100%
<em>ROI = 17% </em>
Answer:
Economic growth can be caused by random fluctuations, seasonal fluctuations, changes in the business cycle, and long-term structural causes. Policy can influence the latter two.
Business cycles refer to the regular cyclical pattern of economic boom (expansions) and bust (recessions). Recessions are characterized by falling output and employment; at the opposite end of the spectrum is an “overheating” economy, characterized by unsustainably rapid economic growth and rising inflation. Capital investment spending is the most cyclical component of economic output, whereas consumption is one of the least cyclical. Government can temper booms and busts through the use of monetary and fiscal policy. Monetary policy refers to changes in overnight interest rates by the Federal Reserve. When the Fed wishes to stimulate economic activity, it reduces interest rates; to curb economic activity, it raises rates. Fiscal policy refers to changes in the federal budget deficit. An increasing deficit stimulates economic activity, whereas a decreasing deficit curbs it. By their nature, policy changes to influence the business cycle affect the economy only temporarily because booms and busts are transient. In recent decades, expansions have become longer and recessions shallower, perhaps because of improved stabilization policy, or perhaps because of good luck.
Answer:
Explanation:
To calculate, the binomial distribution formula can be applied
P(X)= nCx * Px * (1 - P)^(n - x)
Random sample of 6 adults:
P(X≥3) = P(X=3) + P(X=4) + P(X=5) + P(X=6)
(6 C 3)0.30^3 * 0.7(6-3) + (6 C 4)0.30^4* 0.7^(6-4) +(6 C 5)0.30^5* 0.7^(6-5) + (6 C 6)0.30^6* 0.7^(6-6) =
0.1852+0.0595+0.0102+0.0007
= 0.2556
[6 C 3 = 6!/(6-3)!3! = 1*2*3*4*5*6/1*2*3*1*2*3, and to calculate others apply to this formula]
Answer:
B) 0.57%, 1.08%
Explanation:
The computations are shown below:
Dividend yield = (Annual yield) ÷ (market price) × 100
where,
Market price = $94 per share
Annual dividend = $0.53 per share
So, the dividend yield = ($0.53 per share ÷ $94 per share) × 100
= 0.57%
Capital gain yield = (Market price - purchase price) ÷ (purchase price) × 100
= ($94 - $93) ÷ ($93) × 100
= 1.08%
Answer:
a. will be higher than the present value of stock B
Explanation:
Use the formula for dividend discount model (DDM) to calculate the price of each stock;
<u>For Stock A</u>
Price = Div1 /(r-g)
where Div 1 = next year's expected dividend
r = required rate of return
g = dividend growth rate
Price = 4 / (0.10- 0.06)
Price = $100
<u>For Stock B</u>
Price = Div1 /(r-g)
Price = 4 / (0.10 - 0.05)
Price = $80
Therefore, the intrinsic value of stock A will be higher than the present value of stock B
