The investor will show a capital loss of $155.
We gather the following information from this question:
Pop of the fund three years ago : $12
NAV of the fund three years ago : $11.50
Current Pop : $11
Current NAV : $10.45
Number of shares : 100 shares.
We need to calculate capital loss or gain on the 100 shares in the mutual fund.
While taking the cost per unit, <u>we need to consider the public-offer-price (pop) into consideration, since an investor can only buy the shares at pop</u>.
Similarly, while selling the shares, the <u>shareholder can liquidate his position by selling back to the mutual fund at the NAV prevailing at the end of the business day</u> on which he wants to sell.
So, the formula to calculate capital gain or loss is:
Answer:
E. Reports how equity changes over a period of time.
Explanation:
Statement of owner's equity as the name suggests is the statement which describes the changes in owner's equity, as it is obvious that the change cannot occur at a point of time, it will occur over a period of time.
And therefore, the statement is prepared over a period generally for a fiscal year, or a financial year.
There is no statement prepared to show any change in owner's equity at a point.
Statement reporting cash flows is called cash flow statement.
Therefore, correct option is:
Statement E
Following a budget will help you keep you out of debt if you are currently in debt.
Answer:
annual income = $70,292.52
Explanation:
initial outlay $900,000
in order to determine the net cash flows per year we can use the present value of an ordinary annuity:
PV = annual cash flow x annuity factor
- PV = $900,000
- annuity factor, 15%, 12 years = 6.1944
annual cash flow = $900,000 / 6.1944 = $145,292.52
annual cash flow = [(revenue - operating costs - depreciation) x (1 - tax rate)] + depreciation
- revenue - operating costs - depreciation = annual income
- tax rate = 0?
- depreciation = $900,000 / 12 = $75,000
$145,292.52 = annual income + $75,000
annual income = $145,292.52 - $75,000 = $70,292.52
Answer:
P0 = $51.9956 rounded off to $52.00
Explanation:
The two stage growth model of DDM will be used to calculate the price of a stock whose dividends are expected to grow over time with two different growth rates. The DDM values a stock based on the present value of the expected future dividends from the stock.
The formula for price of the stock today under this model is,
P0 = D0 * (1+g1) / (1+r) + D0 * (1+g1)^2 / (1+r)^2 + ... + D0 * (1+g1)^n / (1+r)^n + [ (D0 * (1+g1)^n * (1+g2) / (r - g2)) / (1+r)^n ]
Where,
- D0 is the dividend today or most recently paid dividend
- g1 is the initial growth rate which is 20%
- g2 is the constant growth rate which is 8%
- r is the required rate of return
P0 = 2.5 * (1+0.2) / (1+0.15) + 2.5 * (1+0.2)^2 / (1+0.15)^2 +
2.5 * (1+0.2)^3 / (1+0.15)^3 +
[(2.5 * (1+0.2)^3 * (1+0.08) / (0.15 - 0.08) / (1+0.15)^3)
P0 = $51.9956 rounded off to $52.00
