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kari74 [83]
3 years ago
8

Ohn invests 1000 in a fund which earns interest during the first year ata nominal rate of compounded quarterly. during the 2nd y

ear the fund earns interest at anominal discount rate of compounded quarterly. at the end of the 2nd year, the fund hasaccumulated to 1173.54
Business
1 answer:
LuckyWell [14K]3 years ago
3 0
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Payback period is the amount of time it will take to recoup, in the form of net cash inflows, the total dollars invested in a pr
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3 years ago
XYZ, Inc. just paid an annual per share dividend of $3.50. Dividends are expected to grow at a rate of 3% per year from here on
Agata [3.3K]

Answer:

P0 = $42.4117 rounded off to $41.41

Explanation:

Using the constant growth model of dividend discount model, we can calculate the price of the stock today. The DDM values a stock based on the present value of the expected future dividends from the stock. The formula for price today under this model is,

P0 = D0 * (1+g) / (r - g)

Where,

D0 is the dividend paid  recentl

D0 * (1+g) is dividend expected for the next period /year

g is the growth rate

r is the required rate of return or cost of equity

First we need to calculate the required rate of return on this stock using CAPM.

Using the CAPM, we can calculate the required rate of return on a stock. This is the minimum return required by the investors to invest in a stock based on its systematic risk, the market's risk premium and the risk free rate.

The formula for required rate of return under CAPM is,

r = rRF + Beta * (rM - rRF)

Where,

rRF is the risk free rate

rpM is the market return

r = 0.025 + 2 * (0.07 - 0.025)

r = 0.115 or 11.5%

Using the constant growth of dividend formula,

P0 = 3.5 * (1+0.03)  /  (0.115 - 0.03)

P0 = $42.4117 rounded off to $41.41

3 0
3 years ago
Worldwide Electronics is a global manufacturing firm that produces televisions, monitors, and other consumer electronic equipmen
Paha777 [63]

Answer:

Explanation:

1. JH Green, Corporate Personnel Officer   - Discretionary cost center

2. Kalya Borodina, Sales Manager, Peru     - Revenue center

3. Jay Smith, Chief Executive Office            -  Investment center

4. Andres Goya, Vice-President, South America  - Profit center

5. Irene Chan, Mexico City Plant Manager   - Cost center

6 0
2 years ago
A.R.C. is a large non-profit humanitarian aid organization that has been forced to pull out of several African markets in recent
irga5000 [103]

Answer:d

Explanation: Economic instability can include a volatile inflation rate and volatile rate of economic growth. It can involve higher unemployment and uncertainty about the economic cycle.

big fall in stock markets can trigger falls in consumer confidence and lead to a recession. The Wall Street crash of 1929 was a primary cause of the great depression. However, the stock market crash of 1987 did not cause an economic downturn. In fact, in the UK it was followed by an unprecedented economic boom. This was partly due to the way the government responded by cutting income tax and cutting interest rates. Interest rates are used as a tool in controlling inflation. However, they can also have an impact on consumer spending. Sometimes interest rates may have little impact; however, if they coincide with other factors they can cause a much bigger than expected fall in consumer spending. For example, in the UK, many homeowners have a variable mortgage. Therefore a small change in interest rates can have a big effect on disposable income. If an increase in interest rates was combined with another factor such as the slowing down of house price growth it may cause a big fall in spending. Number One priority to Target Economic growth and reduce unemployment. At the very least, economic growth needs to be close to long run trend rate 2.5%; it actually needs to be higher to catch up with lost spare capacity. Strong growth will help boost tax revenues and reduce unemployment. It is only in this climate you can successfully reduce the deficit. There is supply-side unemployment, especially in Europe, which has seen prolonged structural unemployment in past two decades. But, the fundamental cause is lack of aggregate demand

8 0
3 years ago
An associate is seeking advice on which device to purchase for a friend who is a business owner. The friend needs the ability to
Anton [14]

Answer: The following would be the best recommendation: <u><em>Smart watch</em></u>

<u><em>Under this case the associate is purchasing the gift for his friend and from the given option it can be easily stated that  smart watch will the best gift. </em></u>

Smart watch will help his friend and give him the ability to chat activity while keeping in contact with the home office.

<u><em>Therefore, the correct option is (a).</em></u>

8 0
2 years ago
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