The compound interest is 8.775%.
interest = p.
p is principal, i is the interest rate, and n is the periods. Inthis case, p is 2 and the interest is .8. (We can divide both sides by a million to make it simpler.) The number of periods is 4.
.8 = (2)(i)(4)
.8 = 8i
i = 10%. (solution)
Compound interest, again, is
interest = p [(1+r)^m - 1]
This time we can't cancel out the p by default. We must divide by 2if we want to avoid multiplying through. After doing so, we add 1to both sides.
1.4 = (1+r)^4
Log both sides.
log(1.4) = 4log(1+r)
log(1.4) / 4 = .0365 = log(1+r)
10^.0365 = 1 + r
1.08775 - 1 = r
r = 8.775%.
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Tanger owner when is noches
Answer:
A) 10.15%
Explanation:
Cost of equity (Re) = 14.06% or 0.1406
cost of preferred stock (Rp) = 7/65 = 0.10769
cost of bonds (Rb) = 7.5% or 0.075
outstanding shares = 2.5 million shares x $42 = $105 million
bonds outstanding = $1,000 x 80,000 bonds = $80 million
preferred stock = $65 x 750,000 = $48.75 million
corporate tax rate = 38% or 0.38
total market value of equity + debt (in millions) = $105 + $48.75 + $80 = $233.75
WACC = [(outstanding shares / total market value) x Re] + [(preferred stock / total market value) x Rp] + {[(bonds outstanding / total market value) x Rb] x (1 - tax rate)}
WACC = [($105m / $233.75m) x 0.1406] + [($48.75m / $233.75m) x 0.10769] + {[($80m / $233.75m) x 0.075] x (1 - 0.38)}
WACC = 0.06316 + 0.02246 + 0.01591 = 0.10153 or 10.15%
Answer:
Wagner will pay 10 million in dividends
Explanation:
The company will use their retained earnings to finance their project and distribute dividends with the remaining amount.
Thats because the investment projects expect return greater than 15% therefore the manager will decide to maximize value of the share and reinvest the earnings to get a better cashflow in the future.
retained earings= 100,000,000 income - 20,000,000 dividends =
80,000,000 retained earnings
<u>(70,000,000) investment </u>
10,000,000 available for dividends.
The rate you expect to see on a treasury bill is 5.31%.
Short-term government securities and Treasury Bills have maturities ranging from a few days to 52 weeks. The face value of bills is discounted when they are sold. Since the U.S. government backs Treasury Bills, they are regarded as a secure and conservative investment. T-Bills are typically kept until they reach maturity. However, some holders could prefer to cash out before maturity and take advantage of the benefits from the investment's short-term interest by reselling it on the secondary market.
The real rate is 3. 75%
= 3. 75/100
= 0.0375
The inflation rate is 1.5%
= 1. 5 /100
= 0.015
Therefore the rate on the treasury bill can be calculated as follows
= (1+0.015)(1+0.0375)-1
= (1.015×1.0375)-1
= 1.0531-1
= 0.0531×100
= 5.31%
Hence the rate that is expected to be seen on the treasury bill is 5.31%.
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