Answer: -$100
Explanation:
Value of forward contract = Selling price - Forward price on bond
Forward price = Present value of cashflows + Present value of bond
Periodic rate = 7%/ 2 = 3.5% per semi annum
= 8% / 2 = 4%
3.5% will be used to discount the payment 6 months from now as that is the 6 month rate. The rest will be 4%.
= (80 / (1 + 3.5%) ) + ( 80 / ( 1 + 4%)²) + (940 / ( 1 +4%)²)
= $1,020.342
= $1,020
Value of forward contract = 920 - 1,020
= -$100
Answer:
Missing out on the benefits I get from working out using exercise equipment in my garage.
Explanation:
When an option is chosen from alternatives, the opportunity cost is the "cost" incurred by not enjoying the benefit associated with the best alternative choice. The New Oxford American Dictionary defines it as "the loss of potential gain from other alternatives when one alternative is chosen." Since Choice B is the next best choice to hiking, missing out on the benefits of working out will be my opportunity cost.
Answer: The answers are provided below.
Explanation:
A stock dividend occurs when the firm uses the money that was meant to be paid to the shareholders as cash dividend to buy additional common shares for them. A stock split occurs when a firm gives two or more new shares to every existing share that an investor holds.
As an investor, I'll consider whether the aim of the company in making a stock split or issuing a stock dividend aligns with my aim of investing in the company. In a case where the aims doesn't align with mine, I'll go and invest in another firm.
A company declaring 100% dividend shows growth and also, as a stakeholder, tax may not be paid by me. Stock split gives room for small investors to invest and it also reduces share price.
