It is because they do hard stuff and the economy is good.
Answer:
She will have $16,772.59 more in the second investment.
Explanation:
Giving the following information:
Recently she received an inheritance of $54,000 from her grandmother's estate. She plans to use the money for the down payment on a home in ten years when she finishes her education.
We need to use the following formula:
FV= PV*(1+i)^n
First savings account:
FV= 54,000*(1+0.04)^10= $79,933.19
Second investment:
FV= 54,000*(1+0.06)^10= $96,705.78
She will have (96,705.78 - 79,933.19) $16,772.59 more in the second investment.
To get the growth rate, we will follow the Gordon Growth modelP= D/(K-G)whereP= stock value=$68D= Expected dividend=$3.85G= Growth rateK= required rate of returnG =K-(D/P)Substitute the given valuesG= 0.11-(3.85/68)
G= 5.34%The growth rate for stock required is 5.34%
Answer:
8.38%
Explanation:
Data provided
Annual dividend = $8.5
Perpetual preferred stock = $102.50
Flotation cost = 4.00%
The computation of cost of preferred stock is shown below:-
Cost of preferred stock = Annual dividend - (Perpetual preferred stock - (Perpetual preferred stock × Flotation cost percentage))
= $8.5 ÷ ($102.50 - ($102.50 × 0.04))
= $8.5 ÷ ($102.50 - $4.1)
= $8.5 ÷ $101.4
= 8.38%
Answer:
The electric guitar division should be: Kept
Explanation:
Currently it has a profit of $280 individually and After elimination it will incur a loss of $4280 which is the loss of profit of 280 and current loss of $4,000. This division should be kept because it is making enough profit to compensate all the avoidable and unavoidable expenses with making addition profit of $280, Otherwise there will be a net loss of $4,280 due to some unavoidable expenses.
Working is made in an attached MS Excel file, please find it.
