<span>Answer B is correct. Paying off your credit card bill will reduce the amount of debt you have and improve your credit score. Closing old credit cards only works if they are unused. As savings accounts are not included in a credit report, opening a new savings account will not have an effect, either negative or positive, on your credit score. Using up your credit limit will have the negative effect of lowering your credit score.</span>
Answer:
Explanation:
a.)
Dividend discount model(DDM) is used to determine the price of a stock.
The formula is as follows;
Price ;P0 = D1 /(r-g)
D1 = Dividend in year 1
r = capitalization rate or required rate of return
g = dividend growth rate
P0 = 8/( 0.10-0.05)
P0 = 160.
The price of the Fi corporation's stock is therefore $160.
b.)
Use the formula that shows the relationship between ROE , retention rate and growth rate. It's as follows;
g = ROE *b
g = growth rate
b = retention rate
Given Earnings per Share (EPS) = $12 and dividend = $8, find dividend payout ratio first.
retention ratio = (1 -dividend payout ratio)
dividend payout ratio = 8/12 = 0.667 or 66.7%
retention ratio ; b = (1 -0.667)
b = 0.333 or 33.3%
Plug it in the formula;
0.05 = ROE * 0.333
ROE = 0.05/0.333
ROE = 0.15 or 15%
c.)
This question is asking for the Present Value of Growth Opportunity (PVGO)
The formula is as follows;
PVGO = Price - EPS1 /r
Price = $160 (from part a)
Expected earnings per share (EPS) = $12
required rate of return(capitalization rate) ; r = 10% or 0.10 as a decimal
PVGO = 160 - 12/0.10
PVGO = 160 -120
PVGO = $40
Therefore, the market is paying $40 per share for growth opportunities.
Answer:
Strengths, Weaknesses, Opportunities, and Threats analysis
Explanation:
Strengths, Weaknesses, Opportunities, and Threats analysis
Answer:
The carrying value at year three end is $115,000.
Explanation:
The bond amortization schedule shows the how the interest expense is calculated as well as the coupon payment at each year end.
The carrying value at each year end is the opening carrying value in that year plus interest expense(as % of opening carrying value) minus the coupon payment(as % of face value).
In the beginning carrying value is the price the bond was issued,which could be computed using the pv formula in excel.
=-pv(rate,nper,pmt,fv)
the rate is yield to maturity of 5%
nper is the number of coupon payments to be made by the bond,which is 3
pmt is the yearly coupon payment which is:$115,000*4%=$4,600
fv is the face value of $115,000
=-pv(5%,3,4600,115000)=$111,868.26
Find attached amortization schedule.
Answer:
$90,000
Explanation:
Income = Contribution - Fixed Costs
hence,
Fixed Costs = Contribution - Income
therefore
Fixed Costs = (25,000 x $6) - $60,000
= $150,000 - $60,000
= $90,000
thus,
total fixed costs must be $90,000.
