Answer:
a. Ted gets the hut; Sadie gets the rest.
Explanation:
Since Ted placed a much more higher priority on the hut by assigning it 35 points more than all other items, and Sadie placed a very low priority on the hut by assigning it 10 points when compared to all other items, it shows Ted is ready to let go of other items just to have the hut, and Sadie is ready to let go of the hut to have the other item. Hence, the "Ted gets the hut, Sadie gets the rest" splits is efficient.
Answer:
The value of the stock today is $20
Explanation:
Using the CAPM equation, we first calculate the required rate of retunr on the stock.
The equation for CAPM is,
r = rRF + Beta * rpM
Where,
- rRF is the risk free rate
- rpM is the risk premium on market
- Beta * rpM is the risk premium on stock
r = 0.05 + 0.04
r = 0.09 or 9%
The value of the stock can be calculated using the zero growth model of DDM. The DDM values the stock based on the present value of the expected future dividends from the stock. As the dividend from the stock is expected to remain constant through out to an indefinite period, the value of the stock today is,
P0 = Dividend / r
P0 = 1.8 / 0.09
P0 = $20
Answer:
Term bond $725,000
Debenture bonds $775,000
Explanation:
Calculation to determine the total amounts of term bonds and debenture bonds
TERM BONDS
6.5% unsecured convertible bonds of $225,000
Add 4.875% guaranty secured bonds of $500,000
TOTAL term bond total $725,000
($225,000+$500,00
DEBENTURE BONDS
5.375% registered bonds of $550,000
Add 6.5% convertible bonds of $225,000,
TOTAL Debenture bonds $775,000
($550,000+$225,000)
Therefore the total amounts of term bonds will be $725,000 and debenture bonds will be $775,000
What would likely happen after the news spread is that there will be a decrease in supply for mp3 players. It is because mp3 players are considered to be loud music for it is need to be plugged on the ears for better sound and hearing in listening to music. If it is claimed that it increases hearing loss, people will be alarmed and think that the mp3 players will contribute to this problem, giving the effect of other people not buying it, decreasing the supply.
