<span>Her PMI will automatically be dropped when her mortgage balance drops to 78% of the home's ORIGINAL value of $200,000. The new value of the home is not relevant.</span>
Answer: Permitted if the price offered by the Third Market Maker is better.
Explanation:
The Securities and Exchange Commission (SEC) requires that when executing trades, the trader should seek for execution at the <em>best market</em>. This means that the trader should trade in the market that is most price efficient.
Should the stock in question be available for trade in various markets, best practice would indicate that the dealer find the market that is offering the best prices and route the order to it.
Answer:
A) a linear, B) downward-sloping line.
Explanation:
- As the company would maximize its profit thus it divides the total revenue by quantity. As a form in a competitive market with the perfect competition, it has a profit which is completely revenu to the total costs. Which is calculated by the formula:
- Total Revenue = Price * Quantity
- The Average Revenue will be = Total Revenue / Quantity
- The Marginal Revenue shall be = Change in Total Revenue / Change in Quantity of the product.
- The AR will be the amount of revenue a company receives for each unit of output. The MR will be the change in the total revenue of output sold.
- For the perfect competition, both the AR and MR will be equal to price.
Answer:
The required rate of return on the stock is 8.087%
Explanation:
The constant growth model of DDM is used to calculate the price of a stock whose dividends are expected to grow at a constant rate forever. The DDM values a stock based on the present value of the expected future dividends from the stock. The price of the stock under this model can be calculated as,
P0 = D0 * (1+g) / (r - g)
Where,
- P0 is price of the stock today
- D0 * (1+g) is the dividend expected from the stock for the next period
- r is the required rate of return
- g is the constant growth rate in dividends
To calculate the r or required rate of return, we first need to determine the dividend that was paid last year. Then we will apply the constant growth rate to that dividend to calculate the dividend today or D0. We will them input the value of stock price, the current dividend and the dividend growth rate in the formula above to calculate the required rate of return.
<u>Dividend per share - Last year</u>
Dividend yield = Dividend per share / Price per share
0.035 = Dividend per share / 28
0.035 * 28 = Dividend per share
Dividend per share = $0.98
The dividend per share today (D0) is,
D0 = 0.98 * (1+0.05)
D0 = $1.029
35 = 1.029 * (1+0.05) / (r - 0.05)
35 * (r - 0.05) = 1.08045
35r - 1.75 = 1.08045
35r = 1.08045 + 1.75
r = 2.83045 / 35
r = 0.08087 or 8.087%
