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stealth61 [152]
3 years ago
5

If a security currently worth $12,800 will be worth $16,843.93 seven years in the future, what is the implied interest rate the

investor will earn on the security—assuming that no additional deposits or withdrawals are made?
Business
1 answer:
dangina [55]3 years ago
7 0

Answer:

The implied interest rate will be 4%

Explanation:

We need to check for the annual rate that generate the interest over the next seven years that makes $12,800 become $16,843.93:

principal  * (1 + rate)^{7}  = $future value

We replace with our know values

12,800 x (1+rate)^7   = 16,843.93

16,843.93 /12,800    =  (1+rate)^7

sq7 (16,843.93/12,800) - 1 = rate

And know we find out the unknow value

rate = 0,03999994  =  0.04  = 4%

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Sustainable Growth Rate You have located the following information on Rock Company: debt ratio = 46.5%, capital intensity ratio
Sliva [168]

Answer:

The correct answer is 10.72% ( Approx.).

Explanation:

According to the scenario, the given data are as follows:

Debt ratio = 46.5%

Capital intensity ratio = 2.51 times

Profit margins = 21%

Dividend payout = 38%

Formula to calculate sustainable growth rate ae as follows:

Sustainable growth rate = (Earnings retention rate × Return on equity ) / ( 1 - (ROE × RR)

where, Retention rate =(1 - dividend payout rate)

= (1-0.38) = 0.62

ROE = Profit margin × Total asset turonver × Equity multipler

= Profit margin × 1/capital intensity ratio × 1/(1-debt ratio)

= .21 × (1/2.51) × 1/(1-.465)

= .21 × 0.398 × 1.869

= 0.1562

=15.62%

So, Sustainable growth rate = (0.1562*0.62) / 1 - (0.1562*0.62)

= 0.096844 / 0.903156

= 0.1072

= 10.72% (approx.)

Hence, the correct answer is 10.72% (approx.).

7 0
4 years ago
Farley Inc. has perpetual preferred stock outstanding that sells for $30 a share and pays a dividend of $4.00 at the end of each
nikklg [1K]

Answer:

the required rate of return i r=0.13%

Explanation:

In order to calculate the required rate of interest in the case of a perpetual preferred stock we will use the following formula:

P(p) = D(p) / r

where P(p) is the preferred price of the stock, D(p) is the preferred dividend price and r is the required rate of interest.

This gives us the following values:

30 = 4 / r

r = 4 / 30

r = 0.13%

4 0
4 years ago
It costs Waterway Industries $28 of variable costs and $14.40 of allocated fixed costs to produce an industrial trash can that s
Georgia [21]

Answer:

Special request income 33,000

Explanation:

special request:

3000 units x $39 = 117,000

variable cost:

3000 units x $28 = 84,000

<u>Contribution margin 33,000</u>

special cost:              <em>none</em>

additional fixed cost:   <em>none</em>

Special request income 33,000

Notice:

Non additional shipping or setup cost is request for the order.

Non increase in fixed cost due to excess capacity.

If any of this concept do inccur in additional cost, it should be relevant as well in the calculations.

7 0
3 years ago
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MAXImum [283]

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Learn more about the burden of this tax here.

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4 0
2 years ago
is the most comprehensive standard as it provides a set of requirements for a quality management system for all organizations, b
Greeley [361]

ISO 9001:2008 is the most comprehensive standard as it provides a set of requirements for a quality management system for all organizations, both private and public.

<h3>What is ISO 9001:2008 Quality management systems ?</h3>

It aims to increase customer satisfaction through the effective application of the system, including processes for continuous system improvement and the assurance of conformity to customer and applicable statutory and regulatory requirements. The ISO 9001:2008 standard outlines the specifications for a quality management system where a company must prove its capacity to consistently deliver a product that complies with customer and relevant legal and regulatory criteria.

No matter the type, size, or type of product offered, all requirements of ISO 9001:2008 are generic and intended to be relevant to all enterprises.

Any ISO 9001:2008 requirement(s) that cannot be applied because of the nature of the business or the product might be excluded.

When exclusions are made, claims of conformity to ISO 9001:2008 are not acceptable unless they are restricted to Clause 7 requirements and do not affect the organization's capacity or obligation to deliver a product that complies with the needs of the customer and any applicable legal and regulatory requirements.

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8 0
2 years ago
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