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tigry1 [53]
3 years ago
9

Three students have each saved $1,000. Each has an investment opportunity in which he or she can invest up to $2,000. Here are t

he rates of return on the students’ investment projects:
Student Return (Percent)
Harry 5
Ron 8
Hermione 20
Assume borrowing and lending is prohibited, so each student uses only personal saving to finance his or her own investment project.

Now suppose their school opens up a market for loanable funds in which students can borrow and lend among themselves at an interest rate r . A student would choose to be a lender in this market if his or her expected rate of return isless than r . Suppose the interest rate is 6 percent. Among these three students, the quantity of loanable funds supplied would be $_____, and quantity demanded would be $______. Now suppose the interest rate is 12 percent. Among these three students, the quantity of loanable funds supplied would be $ ______, and quantity demanded would be $ _____.
Business
1 answer:
ruslelena [56]3 years ago
6 0
How would the question best fit the bar thing
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What is the purpose of checks and balances in the constitution?
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The Jackson-Timberlake Wardrobe Co. just paid a dividend of $2.15 per share on its stock. The dividends are expected to grow at
tekilochka [14]

Answer:

a)  

$34.4

b)

$37.20

c) $59.57

Explanation:

Given:

Dividend paid = $2.15

Growth rate = 4% = 0.04

Required return = 10.5% = 0.105

Now,

a) Present value = \frac{\textup{Dividend paid}\times\textup{(1 +growth rate)}^n}{\textup{(Required return-Growth rate)}}

for the current price n = 1

thus,

Current price = \frac{\textup{Dividend paid}\times\textup{(1+growth rate)}^n}{\textup{(Required return-Growth rate)}}

=  \frac{\textup{2.15}\times\textup{(1 +0.04)}^1}{\textup{(0.105-0.04)}}

=  $34.4

b) Price in 3 years

i.e n = 3

= \frac{\textup{Dividend paid}\times\textup{(1 +growth rate)}^n}{\textup{(Required return-Growth rate)}}

=  \frac{\textup{2.15}\times\textup{(1 +0.04)}^3}{\textup{(0.105-0.04)}}

=

$37.20

c) Price in 15 years

i.e n = 15

= \frac{\textup{Dividend paid}\times\textup{(1 +growth rate)}^n}{\textup{(Required return-Growth rate)}}

=  \frac{\textup{2.15}\times\textup{(1 +0.04)}^{15}}{\textup{(0.105-0.04)}}

=  $59.57

4 0
3 years ago
Ctrl+_______ selects the last cell with data.
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Answer:

realistic job preview

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