Answer:
D) $6,400
Explanation:
To calculate the points deducted by Marcia in the current year, we use the following method
Since she collected the loan in July of the current year, there is five (5) months remaining in the current year, for Marcia to deduct any point, the will need to divide the number of month(s) remaining by the money she borrowed while we have have as;
$320,000/ 5
= $64,000
Answer:
The correct answer is B. $110,000.
Explanation:
Equity balance mean what a business owes to its owner. The amount invested by owner and net profit earned is part of it is part of equity. Dividend in case of company equals to drawing. It means that equity is net of any dividend payment made by the company.The detail calculation are given below.
Stockholders' equity opening balance $ 40,000
Year net income $ 90,000
Dividend paid ($ 20,000)
Stockholders' equity closing balance $ 110,000
Answer:
$88,321.59
Explanation:
Assuming that inflation remains constant at a rate of 2% over 40 years, this problem can be treaded as an annually compounded interest problem, with a principal of $40,000 at a 2% per year rate for 40 years.
The equivalent annual income (E) adjusted for inflation is given by:
In 40 years, the equivalent retirement income will be $88,321.59.
The answer is D. both B and C would hedge the risk
Answer:
30.92%
Explanation:
You find the answer by calculating the cost of equity using two methods; Dividend discount model and CAPM
<u>Dividend discount model;</u>
cost of equity; r = (D1/P0) +g
whereby, D1 = next year's dividend = 3.00
P0= current price = 13.65
g = dividend growth rate = 11% or 0.11 as a decimal
r = (3/13.65) + 0.11
r = 0.2198 + 0.11
r= 0.3298 or 32.98%
<u>Using CAPM;</u>
r = risk free + beta (Market risk premium)
r = 0.049 + (2.8 * 0.0856)
r = 0.049 + 0.2397
r = 0.2887 or 28.87%
Next, find the average of the two cost of equities;
=(32.98% + 28.87% )/2
= 30.92%