Answer:
Share price = 29.16
Explanation:
Given:
Dividend paid = $3.50
Required rate of return = 12% = 12/100 = 0.12
Growth rate = 0%
Find:
Share price = ?
Computation:
⇒ Share price = Dividend paid / [Required rate of return - Growth rate
]
⇒
Share price = $3.5/(0.12-0)
⇒ Share price = 29.16
Answer:
(a) $51.92
(b) She will face a loss of $7.66
Explanation:
(a) Market Value of Preferred Stock:
= Dividend ÷ Required Return
= $5.40 ÷ 10.4%
= $51.92
(b) If she sells the stock when the required return on similar-risk preferred stocks has risen to 12.2%.
Market value of the securities:
= $5.40 ÷ 12.2%
= $44.26
therefore,
Market value of the securities - Market Value of Preferred Stock
= $44.26 - $51.92
= $7.66
She will face a loss of $7.66
Answer:
For 1st e and for 2nd b
Explanation:
I don't remember correctly
Answer:
1) if the FED decides to strengthen then dollar, it will make US exports more expensive and imports cheaper. That will cause net exports to decrease, i.e. there will be less exports and more imports.
A strengthening of the US dollar helps importing companies because they will buy cheaper goods from abroad and will be able to sell them at higher domestic prices. On the other hand, exporting companies will be hit because hey loss competitiveness since their products will be more expensive.
2) If the FED decides to weaken the US dollar, the opposite will happen. Exporting companies will be favored, while importing companies will be hurt. The country will start to export more and import less.
3) Generally, the FED intervenes market through its money supply policy. When the interest rate increases or the money supply increases, the value of the US dollar will tend to lower. Even if expansionary monetary policy doesn't have an immediate impact, the expectations do matter. If people expect a devaluation of the US dollar, they will start to buy foreign currencies, which in turn will end up devaluating the US dollar. It is a self-fulfilled prophecy.
Another way the FED impacts businesses is through the interest rate. Lower interest rates will increase both domestic and foreign investment in the US.
Answer:
$24,431
Explanation:
Equity which represents the amount owed to the owners of the business includes retained earnings (which is the accumulation of the net income/loss over the years less dividends paid) and common shares.
If the company failed to record a depreciation expense of $3,686 on equipment, the retained earnings would have been overstated as a result of the overstatement of the net income.
the movement in the retained earnings may be expressed as
opening balance + net income - omitted expense - dividend declared = closing balance
hence the closing balance
= $18,180 - $3,686 +$14,406 - $4,469
= $24,431
