Answer:
The equivalent present worth of the series is $27,714.
Explanation:
We have a series of five payments (n=5), paid at the end of the year, starting with $6,000 and increasing at a rate of 5% per year.
The inflation rate is 4% and the market interest rate is 11%.
The equivalent present worth of the series, where we take into account yearly increments and discount the value by inflation and interest rate, is:
Where:
h: increment in the payments (5%)
i: rate of inflation (4%)
r: market interest rate (11%)
Then,
Answer:
5.4%
Explanation:
Several years ago the Haverford Company sold a $1,000 par value bond that now has 25 years to maturity and an 8.00% annual coupon that is paid quarterly. The bond currently sells for $900.90, and the company’s tax rate is 40%. What is the component cost of debt for use in the WACC calculation
Face value of bond = coupon amount / interest rate
1000 = 80 / 8%
Therefore 900.9 = 80 / revised interest rate
multiply both sides by the 'revised interest rate
revised interest rate x 900.9 = 80
Hence, revised interest rate = 80 / 900.9 = 9%
Secondly if the company’s tax rate is 40%, the component cost of debt for use in the WACC calculation = kd (1 - t)
where:
kd = Cost of debt
t = tax rate
Therefore cost of debt for use in the WACC calculation = 9% (1-0.4) = 5.4%
In Gibbons v. Ogden, the Supreme Court ruled that rail companies D. states could not restrict trade within their jurisdictions.
Under the constitution, rail companies have the electricity to make all laws that shall be vital and proper for carrying into execution the foregoing powers. Aaron Ogden was given permission to function his steamboats in the big apple. Thomas Gibbons changed and allowed to function his steamboats in the big apple.
The ruling in Gibbons v. Ogden asserted Congress's authority to adjust interstate trade on the idea of the Supremacy Clause. It set a precedent that Congress had the strength to overturn country rules if interstate commerce were worried.
The case introduced mild the problem of the trade Clause of the united states charter. It changed into a question of whether or not Congress ought to adjust positive factors of trade. It averted states from establishing similar monopolistic rail companies' legal guidelines, encouraging an increase in steamboat journey and cargo delivery. This increased change opportunities between states, boosting states' economies.
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Based on economic theory, scarcity is limitation of a resource which cannot be replenished. Shortage is used to indicate a market condition.
When applying this definition to your question, A is your answer.
