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3 years ago

What is a benefit of stock markets?

Business

2 answers:

sleet_krkn [62]3 years ago

6 0

Answer:

currently there will be no benifits because of the Corona Virus because the stock market is crashing.

Kay [80]3 years ago

6 0

A benefit is that the market allows the average individual investor to get into a diversified portfolio.

It also allow the investor to check the values of their daily holdings and it allows them to add periodically to their accounts. In addition, the market encourages them to put money away for long term-goals.

You might be interested in

MV Corporation has debt with market value of million, common equity with a book value of million, and preferred stock worth mi

kirza4 [7]

Answer:

The Weighted Average cost of capital measures the cost to the company of its current capital structure by using the weights of the various capital measures. WACC usually uses market values so;

Total amount = Debt + Preferred stock + common equity

= 100 million + 20 million + ( 50 * 6 million)

= $420 million

<u>Proportions.</u>

Debt

= 100/420

= 24%

Preferred Stock<u> </u>

= 20/420

= 5%

Common Equity

= 300/420

= 71%

6 0

3 years ago

Phoenix Guitars is interested in pursuing backward integration to take greater ownership of the extraction of raw materials and

jok3333 [9.3K]

Answer:

Option A

Explanation:

In simple words, Regardless of the expense of making guitars, the technique reduces the total cost of manufacturing a instrument. Phoenix would be in the production business of instruments, not pickups.

The target of this technique is therefore the entire guitar, not really the pickups. The smaller the process of manufacturing their instruments, the better manoeuvrability they have on the market. When they have reduced costs, they may change rates downwards in order to capture further market penetration.

5 0

3 years ago

An appliance manufacturer wants to contract with a repair shop to handle authorized repairs in Indianapolis. The company has set

luda_lava [24]

Although one would repair at the most time of 76 minutes, the other is at most 77.1 minutes. I would pick the second one because they may take longer by 1.1 minutes at most, they also included seconds, which seems more like an honest bid time.

3 0

3 years ago

Fontaine Inc. recently reported net income of $2 million. It has 500,000 shares of common stock, which currently trades at $40 a

Firlakuza [10]

Answer:

$50

Explanation:

Given,

Current Net income = $2,000,000

No. of common shares today = 500,000

Current market price per share = $40

Anticipated Net income in 1 year = $ 3,250,000

Anticipated No. of common shares in 1 year = 500,000 +150000 =650,000

From this data, then

The current Earnings Per Share(EPS) = $\frac{2,000,000}{500,000} = 4$

Current Price/Earning ratio = $\frac{ Price per share}{EPS} = \frac{40}{4} = 10$

Anticipated EPS in 1 year= $\frac{Anticipated Net income in 1 year }{Anticipated No. of common shares in 1 year } = \frac{3,250,000}{650,000} = $5$

If the company's P/E ratio remain as that of the current at 10, then

The anticipated price of stock in 1 year = Anticipated EPS * P/E ratio in 1 year

= $5 *10 = $50

4 0

3 years ago

Rydell Inc. is evaluating a proposed capital budgeting project that will require an initial investment of $168,000. The project

Inessa [10]

Answer:

-$15,315.21

Reject the project

Explanation:

The net present value is the present value of after tax cash flows from an investment less the amount invested.

The NPV can be found using a financial calculator.

Cash flow in year zero = -168,000

Cash flow in year 1 = $44,800

Cash flow in Year 2 = $51,700

Cash flow in Year 3 = $48,600

Cash flow in Year 4 = $47,900

Interest rate = 10%

NPV = $-15,315.21

To find the NPV using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

The decision rule with NPV is to accept the project if the npv is positive. Since the NPV calculated above is negative, the project should be rejected.

I hope my answer helps you

6 0

3 years ago