Answer:
8.14 times
Explanation:
The computation of the Time interest earned ratio is shown below:
As we know that
Times interest earned ratio = (Earnings before interest and taxes) ÷ (Interest expense)
where,
Earnings before interest and taxes = Income before income tax for the year + Interest expense
But before tha, we need to do the following calculations
The interest amount is
= $350,000 × 0.08
= $28,000
The net profit is
= $1,750,000 × 8%
= $140,000
The EBIT is
= Profit before tax + interest expense
= $140,000 ÷ (1 - 0.30) + $28,000
= $200,000 + $28,000
= $228,000
And, the interest expense is $28,000
So, the TIE ratio is
= $228,000 ÷ $28,000
= 8.14 times
Answer:
Explanation:
The yield to maturity on a bond is the same thing as the required return. The YTM and the coupon rate is a totally different thing. The coupon rate is the interest which is computed on the principal amount whereas yield to maturity is a rate which is held at the maturity and its rate is also generated in maturity date.
So, in the given case, the Coupon rate is 10% and the YTM is 8% as it reflects the maturity i.e two years from now
Explanation:
The computation is shown below::
The dividend yield = Annual dividend ÷ Market share price
where,
Market share price = $22 per share
Annual dividend = $0.88 per share
So, the dividend yield = ($0.88 per share ÷ $22 per share) × 100
= 4.0%
The capital gain rate is
= (Expected share price - initial price) ÷ (Initial price) × 100
= ($23.54 - $22) ÷ ($22) × 100
= $1.54 ÷ $22 × 100
= 7.0%
Now the total return is
=(Expected share price + expected dividend - initial price) ÷ (Initial price) × 100
= ($23.54 + $0.88 - $22) ÷ ($22) × 100
= $2.42 ÷ $22 × 100
= 11.0%
Answer
In series, the answer of 'this is his' is:
- Principal Amount
- Interest
- Total amount
- Compound interest
Explanation:
- Kevin deposit $100 in a savings bank account, this is his principal. Principal is the initial amount that a person deposit in his account.
- Kevin's money earn 5 percent. the $5 he earn is the interest. Interest is the earning that a person earn on the overall amount deposited.
- Kevin's money worth is $105, this is his total accrued amount. Acquired amount= Principal + Interest
- The interest Kevin earn in first year is the interest in subsequent years. this is called compound interest.
Answer:
B) 2 percent lower
Explanation:
Norminal interest rate is an economic terminology used to describe the interest rate of an economy before considering or adjusting the impact of Inflation on the economy.
Real interest rate is the interest rate of an economy obtained after adjusting the impact or effects of the Inflation. This will reveal the actual cost of borrowing and the yield to the lender of the money.
