Answer:
8.46%
Explanation:
Monthly interest rate = 0.640%
Number of month in year = 12
Investment in non-interest bearing = 6%
Effective annual interest = [(1 + Monthly interest rate)^Number of month] - 1 / (1 - Investment in Non-interest)
Effective annual interest = [(1 + 0.640%)^12] - 1 / (1 - 6%)
Effective annual interest = (1.0064)^12 - 1 / 0.94
Effective annual interest = 1.07956187072 - 1 / 0.94
Effective annual interest = 0.07956187072 / 0.94
Effective annual interest = 0.084640288
Effective annual interest = 8.46%
Hence, the Effective annual is 8.46%.
Answer:
Answer of each requirement is given seperatly below.
a What is the value of Siebel using the DCF method?
Value under DCF = CF * (1+growth rate)/ (WAAC" -Growth rate)
Putting values (assuming after tax earning is all in cash)
Value of SI = 25 (1+6%)/ 20%-6% = 189 million dollars
"WAAC calculation
Here WAAC is equal to cost of equity (ke) as company is debt free.
so
Ke = risk free rate + beta (risk premium)
= 5 + 2.5 (6) = 20%
b What is the value using the comparable recent transactions method?
Based on recent tansaction the value of siebel incorporated will be calculated as shown below
Value of SI = Profit afte * 10 = 25 * 10 = 250 million dollars
Publicly-traded Rand Technology, a direct competitor of Siebel's sale is taken as bench mark.
c What would be the value of the firm if we combine the results of both methods?
By combining value of both value technique we get 189 + 250 = 439 million dollars.
Answer:
current market price = $953.29
Explanation:
the market price of the bond = present value of the face value + present value of coupon payments
PV of face value = $1,000 / (1 + 3.865%)¹⁸ = $505.31
PV of coupon payments = $35 x 12.79935 (PV annuity factor, 3.865%, 18 periods) = $447.98
current market price = $505.31 + $447.98 = $953.29
Conscience is the inner feeling which tell us what is right or wrong. It controls our actions, thoughts and behavior. So the answer is: In ethics, our conscience is what tells us whether something is <span>a. Wrong or right</span>.
