1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Genrish500 [490]
3 years ago
12

British government 3.3% perpetuities pay £3.3 interest at the end of each year forever. Another bond, 1.8% perpetuities, pays £1

.80 a year forever.
a. What is the value of 3.3% perpetuities if the long-term interest rate is 5.3%? (Round your answer to 2 decimal places.) Perpetuity value £
b. What is the value of 1.80% perpetuities? (Round your answer to 2 decimal places.) Perpetuity value £
Business
1 answer:
Yakvenalex [24]3 years ago
6 0

Answer:

Explanation:

Perpetuity is a time value of money concept where cashflows occur indefinitely; the recurring payments go on forever.

The formula for finding the present value of these perpetually recurring cashflows is as follows;

PV = CF/ r

whereby,

CF = Cashflow = £3.3

r = rate = 3.3% or 0.033 as a decimal

so PV = 3.3 / 0.033

PV = £100.00

If the rate is 1.80% or 0.018 and recurring CF is £1.80, then PV would be;

PV = 1.80 / 0.018

PV = £100.00

You might be interested in
Apex question: What type of information is best suited for infographics?
alisha [4.7K]
All varieties of information, from bullet pointed text to numerical tables
3 0
4 years ago
Read 2 more answers
Because of an accident royce was involved in, his insurance company has increased his annual premium for auto insurance by 5.2%.
ch4aika [34]
The answer is going to be D.... $571.24
5 0
4 years ago
Read 2 more answers
Tom walks bethany's dog once a day for $50 per week. bethany values this service at $60 per week, while the opportunity cost of
s344n2d4d5 [400]

The total surplus is A. $30.

The surplus is the amount of money that is let over after all requirements have been met/paid. This can also be an excess amount of production that is over the amount of money demanded. The opportunity cost is $30, which is what Tom values his time being worth that he is not getting due to dog walking.

5 0
4 years ago
Tom is talking to his friend Bob, who has an interest in Freedom, LLC, about purchasing his LLC interest. Bob's outside basis in
sleet_krkn [62]

Answer:

Option B is correct.

Tom's outside basis be in Freedom,LLC=$26,100

Explanation:

Option B is correct.

Amount Paid by Tom for buying Bob's LLC interest=$23,000

Tom's Share of LLC debt= $3,100

Tom's outside basis be in Freedom,LLC= Amount Paid by Tom for buying Bob's LLC interest + Tom's Share of LLC debt

Tom's outside basis be in Freedom,LLC= $23,000+$3,100

Tom's outside basis be in Freedom,LLC=$26,100

8 0
3 years ago
How do margin trades magnify both the upside potential and the downside risk of an investment position?
klio [65]

Answer and Explanation:

Margin trades work this way because they allow them to extend the amount of money invested regardless of whether the security's price drops or rises. In a more simplified way, we can state that the margin trade allows that even if the price of a security goes up or down, the invested money presents a percentage of gain or loss much bigger than the original value. This is because this money was deposited as a loan guarantee, allowing interest to run on it, increasing it.

4 0
3 years ago
Other questions:
  • do you think that free enterprise encourage entrepreneurship? does entrepreneurship promote economic change? explain
    9·1 answer
  • Peregrine Company acquires all of the voting stock of Falcon Corporation for $65,000, in a merger. Falcon’s balance sheet report
    5·1 answer
  • Nicolas maduro is the leader of what country, which is struggling with a major economic crisis that includes incredibly high inf
    6·1 answer
  • When entrepreneurs believe that they are responsible for what happens to them and that their own actions determine important out
    9·1 answer
  • The SUV division of a major automobile corporation decides to release a new model a month ahead of its stated release and notifi
    14·1 answer
  • A coupon for $1 off the next purchase of a pizza is an example of which kind of incentive? gift with purchase loyalty program mo
    14·1 answer
  • On April 1, year 1, Cricket Corporation issues $60 million of 12%, 10-year bonds payable at par. Interest on the bonds is payabl
    6·1 answer
  • Problem 8-15 Nonconstant Growth [LO1] Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the st
    9·1 answer
  • The private equity firm Clarence Partners is looking at a leveraged buyout
    6·1 answer
  • Match the jobs with the education requirements.
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!