Answer:
C) The central bank has been increasing the target interest rate at regular intervals and it is now at its highest level in eight years.
Explanation:
Since the central bank has been increasing the interest rates in Terbia, this means that it has been engaging in a contractionary monetary policy. In other words, the central bank has been decreasing the money supply in Terbia. If the money supply has been decreasing constantly during the last 8 years, then the high inflation rate cannot be caused by an increase in the money supply.
Answer:
The 1st ratio examines debt by observing at the company's balance sheet, whereas the other two ratios examine debt by observing at the company's income statement. Thus, debt-to-total-assets ratio processes the %age of assets delivered by debt in order to fund total assets. The computed equation will be: (Total long term debt + Total short term debt) / Total assets). The high debt ratios that overdo the business average might create it expensive for a company to borrow the extra funds without initial raising for more equity. The period’s interest received ratio processes the degree to which the income can fall before the company is incapable to meet its yearly interest expense expenditures. However, the computed equation is EBIT / total interest payable: EBIT is used as the numerator as it is funded with pretax dollars. The company’s capability to pay will not be affected by the taxes. The EBITDA analysis ratio is EBITDA / total interest: This proportion is more comprehensive than the TIE proportion because it identifies that depreciation and payback are not expenses, so these aggregates are accessible to service debt, and lease expenses and principal refunds are fixed expenses.
Answer:
1. P = $156,560; Q = $203,440
2. P = $90,320; Q = 149,680
3. P = -$43,500; Q = $3,500
Explanation:
The explanation is given in images for each situation:
Answer:
d. $ 9.52
Explanation:
The computation of the expected price of the stock 10 years from today is shown below:
= Dividend at year 10 ÷ (Required rate of return - growth rate)
where,
Dividend at year 10 is
= $0.45 × (1 + 0.04)^10
= $0.67
So, the expected price is
= $0.67 ÷ (11% - 4%)
= $9.52
By applying the formula we can easily find out the expected price of the stock
