Answer:
According to fisher equation
(1+nominal Interest rate)=(1+real interest rate)(1+inflation)
1) So 1.17=(1+R)(1.13)
1+R=1.17/1.13
R=1.035-1
R=0.0353
Real interest rate = 3.53 percent
2) (1+NIR)= 1.03*1.04
1+ NIR= 1.072
NIR= 0.072
Nominal interest rate = 7.2 percent
A lender prefers a higher real interest rate as he will earn more money on the amount he has lend if the real interest rate is higher.
A borrower will prefer a lower real interest rate as he will have to pay lower interest payments on an amount if the real interest rate is lower.
Explanation:
Answer:
The correct option is (b)
Explanation:
Aggregate supply curve is upward sloping as output increase with the increase in price. In the short run, wage rate is fixed. As such, in the short run, firms can hire more workers at fixed wage rate. An increase in price indicates more profits, thereby increasing output.
This is the reason for upward sloping AS curve.
Answer:
$50.67 per share
Explanation:
using the discounted cash flow model, we can determine Arras's total value:
CF₀ = $7.6
CF₁ = $7.98
CF₂ = $8.379
CF₃ = $8.79795
CF₄ = $9.2378475
CF₅ = $9.699739875
CF₆ = $9.893734673
we must first find the terminal value at year 5 = $9.893734673 / (7% - 2%) = $197.874694
now we can discount the future cash flows:
firm's value = $7.98/1.07 + $8.379/1.07² + $8.79795/1.07³ + $9.2378475/1.07⁴ + $9.699739875/1.07⁵ + $197.874694/1.07⁵ = $7.458 + $7.319 + $7.182 + $7.048 + $6.916 + $141.081 = $177.004 million
the shareholders' share of the firm's value = $177.004 million - $25 million = $152.004 million
price per share = $152.004 million / 3 million shares = $50.668 ≈ $50.67 per share
Generous- Selfish
Tremendous- Small
Famous- Unknown
Publicity- Secrecy
Imaginative- Unskillful
Outstanding-Unexceptional
