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3 years ago

What do individual shareholders gain when they buy shares of a companies stock?

1 answer:

6 0

Share Ownership by Individuals.
Did you know owning shares means tax advantage. Your tax situation can benefit from using the tax advantage that come with fully franked dividends.owning shares also means you are a company owner. When you are buying shares you are buying the company`s asset and its profits. All that told there many advantages that come along with purchase of shares by an individual who wishes to invest his capital in shares.
Benefits of Owning Shares.

1. Stock Owners Take Advantage of a Growing Economy.
As the economy grows so do cooperates earning that is because economic growth creates income this will create a consumer demand that will automatically drive more revenue into companies register an lead to rise company`s share value.
2. Easy to Buy.
The stock market has made it easy to by shares from companies. They can be purchased through a broker, financial planner or online. Once you have set up an account you can stock at any minute. The stock market runs 24 hours, five days a week making the market reliable and sufficient.
3.They are the Best Way to Stay Ahead of Inflation.
Historically stocks have averaged an annual return of 10%. That is better than the annual inflation of 3.2%. It means you have a longer time horizon. That way a stock owner is limited to the risks aligned with the stock market.
4. They are easy to sell.
The stock market allows you to sell your shares at anytime. That will surely help if you really need the cash in a hurry. One disadvantages related to this is that the prices are really volatile so the shareholder runs the risk to make losses when the make haste decisions.
5. You make money in two ways.
Many investors tend to by shares when they have low prices and sell when they are high. They invest in companies that appreciate in value at at either a fast rate or moderate rate. This attracts both day traders and buy-hold investors and this bridges the gap in making money in to ways.

Summery.
A well defined portfolio will provide most benefits and fewer risk arising to stock ownership. to exchange you shares at a limited risk and get to earn more experts advice apart from stock ownership alone have a mix of stock bonds and commodities. This has proven to be the best way to make highest returns at lower risk. It is important to note that shareholders in stock market contribute close to 80% of the revenue in the market.

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A store offers two payment plans. under the installment plan, you pay 25% down and 25% of the purchase price in each of the next

Ann [662]

Answer

a-1 . The Present Value of the installment plan is $94.38.

We calculate the PV of $25 for each of the three following years with the following formula:

$PV_{Annuity} = Constant Payment * PVIFA_{0.04,3}$

where

PVIFA = Present Value interest factor of an annuity of $1 at 4% for 3 years.

$PVIFA_{0.04,3} = 2.77509103$

We can ascertain this in excel by using the syntax : =pv(0.04,3,-1).

In this syntax, 0.04 is the interest rate, 3 is number of periods and since the annuity is $1 we write 1. We need to put in -1 because otherwise, we'll get the answer as a negative number. This is because excel treats any Present Values as outflows, and records them as negative.

Substituting the values above in the preceding equation we get,

$PV_{Annuity} = 25 * 2.77509103$

$PV_{Annuity} = 69.3772758$

In order to find the Present Value of the installment plan, we need to add the down payment of $25. So,

$PV_{instalment} = $25 + 69.3772758$

PV of instalment = $94.38

a-2. We get a 6% discount when we pay in full, so the purchase price of the product becomes:

$Purchase price = 100 - (100*0.06)$

$Purchase price = $94 (100 - 6)$

Since the purchase price of the pay in full plan is lesser than that of the installment plan, the pay in full plan is a better option.

b-1. The Present Value of the installment plan is $90.75.

Since the first instalment falls due only after one year, we calculate the PV of $25 each of four years with the following formula:

$PV_{Annuity} = Constant Payment * PVIFA_{0.04,4}$

where

PVIFA = Present Value interest factor of an annuity of $1 at 4% for 4 years.

$PVIFA_{0.04,4} = 3.62989522$

We can ascertain this in excel by using the syntax : =pv(0.04,4,-1).

Substituting the values above in the preceding equation we get,

$PV_{Annuity} = 25 * 3.62989522$

$PV_{Annuity} = 90.7473806$

b-2. In this case, the PV of the pay in full plan remains at $94 while that of the instalment plan falls to $90.75. Since the PV of the Instalment plan is lower, we'll choose the instalment plan.

6 0

3 years ago

What are the two related, but distinct processes involved in approach-oriented emotion-focused coping??

Alekssandra [29.7K]

Answer:

Emotional Processing and Emotional Expression

Explanation:

In order to respond to emotional situations, two approaches are involved in approach-oriented emotion-focused coping:

i) Emotional processing: reflects how individuals process stress related events and move past them. In the event of re-occurrence of the events, the individuals will not be as disrupted as when the instance first occurred.

ii) Emotional expression: entails communicating and sharing emotions expressly i.e. whether verbally or non-verbally. Expressive writing on emotional disclosure e.g by use of journals, is known to help individuals to overcome previous depressive symptoms.

3 0

4 years ago

On the basis of the details of the following fixed asset account, indicate the items to be reported on the statement of cash flo

harina [27]

Answer and Explanation:

The items that should be reported on the cash flow statement is shown below;

On March 12 Purchase of fixed assets - investing activity - deducted - $104,300

On Oct 4 Sale of fixed assets - investing activity - added - $63,840

Gain on sale of fixed assets - operating activities - deducted - $31,710 ($95,550 - $63,840)

6 0

3 years ago

Sydney wins a prize. She has a choice of receiving a payment of $160,000 immediately or of receiving a deferred perpetuity with

Mamont248 [21]

Answer:

Instructions are listed below

Explanation:

Giving the following information:

She has a choice of receiving a payment of $160,000 immediately or of receiving deferred perpetuity with $10,000 annual payments, the first payment occurring in exactly four years.

A) i= 5%

First, we need to determine the value of the perpetuity four years from now.

Perpetuity= 10,000/0.05= 200,000

Now, we can calculate the present value:

PV= 200,000/(1.05^4)= $164,540.50

B) i= 6%

Perpetuity= 10,000/0.06= $166,666.67

PV= $166,666.67/1.06^4= $132,015.61

C) She should consider her necessities of cash and the value of the products she can purchase now.

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3 years ago

Consider an investment opportunity set formed with two securities that are perfectly negatively correlated. The global minimum-v

natka813 [3]

Answer:

D.) equal to 0

Explanation:

If a portfolio is made up of two securities that are perfectly negatively correlated, meaning that if one increases its value, the other one will decrease in the exact opposite way, the standard deviation of the portfolio will always be 0. You can determine the variance for each stock, but due to the perfectly negative correlation, they will cancel out.

6 0

3 years ago