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mario62 [17]
3 years ago
9

The balance sheet below is for the First Federal Bank. Assume the required reserve ratio is 20 percent.

Business
1 answer:
lord [1]3 years ago
3 0

Answer:

The answer is option (3) $200,000

Explanation:

Solution

Given that:

The reserve ratio =20%

The Required reserves = 300000*20/100

=60000

The excess reserves = 100000-60000

=$40000

Thus

The Money multiplier = 1/0.20

= 5

Therefore, maximum amount by which loans could be expanded = 40000*5

= $200000

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Answer:

annual withdrawal = $15096.04

Explanation:

given data

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annual withdrawal = \frac{present\ value}{\frac{1-(1+r)^{-t}}{r}}   ................1

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annual withdrawal = \frac{50000}{3.31212}

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3 years ago
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7 0
2 years ago
A company has preferred stock that can be sold for​ $21 per share. The preferred stock pays an annual dividend of​ 3.5% based on
NeX [460]

Answer:<em> </em><em>Therefore, the cost of preferred stock is </em><em>17.72%.</em>

Given:

Selling price (preferred stock) = $21

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We can compute the cost of preferred stock as:

cost \ of \ preferred \ stock = \frac{annual \ dividend}{( Price\ of \ stock - Flotation\ costs )}\\

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<u><em>The correct option is (b)</em></u>

3 0
3 years ago
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The Hays company is a regional soda company in the Midwest. It started out making a handful of sodas like cola, diet-cola, orang
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