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3 years ago

The amount paid to a depositor for keeping their money in a savings account is called

Business

1 answer:

evablogger [386]3 years ago

3 0

The amount paid to a depositor for keeping their money in a savings account is called <u>"interest".</u>

You can open different sorts of personal savings accounts with banks, merchants and speculation firms. Savings accounts offer low returns contrasted and most different speculations, however are okay and a decent method to acquire enthusiasm until the point when you are prepared to move assets into higher-return ventures, for example, stocks and bonds.

The interest on every single individual savings accounts is computed as compound interest.

Regular savings accounts normally pay bring down loan fees than those paid by currency market accounts.

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Dickinson Company has $11,880,000 million in assets. Currently half of these assets are financed with long-term debt at 9.4 perc

Ronch [10]

Answer:

Dickinson Company

a) Effect of each plan on earnings per share:

Current Plan Plan D Plan E

Earnings per share $0.45 $0.36 $0.45

b-1) Earnings per share $0 $0 $0.14

b-2. Plan E would be most favorable if return on assets fell to 4.70%.

b-3 Earnings per share $0.93 $0.70 $0.76

b-4 Current Plan would be most favorable if return on assets increased to 14.4%.

c-1 Earnings per share $0.45 $0.36 $0.45

c-2 If the market price for common stock rose to $12 before the restructuring, Plan E would then be most attractive to the company as it would get additional paid-in capital of $1,485,000 ($4 * 371,250).

Explanation:

a) Data and Calculations:

Return on assets before interest and taxes = 9.4%

Tax rate = 40%

Current Plan Plan D Plan E

Assets $11,880,000 $11,880,000 $11,800,000

Long-term debt 5,940,000 5,940,000 2,970,000

New debt 2,970,000

Total debt 8,910,000

Common stock 5,940,000 5,940,000 8,910,000

Less repurchased shares (2,970,000)

New common stock 2,970,000

Interest rate of old debt 9.4% 9.4% 9.4%

Interest rate for new debt 11.4%

Stock par value $8 $8 $8

Return on assets before

interest and taxes $1,116,720 $1,116,720 $1,116,720

Interest expense 558,360 896,940 298,180

Return before taxes $558,360 $219,780 $837,540

Tax rate = 40% 223,344 87,912 335,016

Return after taxes $335,016 $131,868 $502,524

Shares outstanding 742,500 371,250 1,113,750

Earnings per share $0.45 $0.36 $0.45

Return on assets falling to 4.70%

Return on assets before

interest and taxes $558,360 $558,360 $558,360

Interest expense 558,360 896,940 298,180

Return before taxes $0 -$338,580 $260,180

Tax rate = 40% 0 0 104,072

Return after taxes $0 $0 $156,108

Shares outstanding 742,500 371,250 1,113,750

Earnings per share $0 $0 $0.14

Return on assets increasing to 14.4%:

Return on assets before

interest and taxes $1,710,720 $1,710,720 $1,710,720

Interest expense 558,360 896,940 298,180

Return before taxes $1,152,360 $431,380 $1,412,540

Tax rate = 40% 460,944 172,552 565,016

Return after taxes $691,416 $258,828 $847,524

Shares outstanding 742,500 371,250 1,113,750

Earnings per share $0.93 $0.70 $0.76

Market price for common stock rose to $12 before restructuring:

Return on assets before

interest and taxes $1,116,720 $1,116,720 $1,116,720

Interest expense 558,360 896,940 298,180

Return before taxes $558,360 $219,780 $837,540

Tax rate = 40% 223,344 87,912 335,016

Return after taxes $335,016 $131,868 $502,524

Shares outstanding 742,500 371,250 1,113,750

Earnings per share $0.45 $0.36 $0.45

6 0

3 years ago

Which of the following policies should a country implement in an economic downturn to avoid a Paradox of Thrift?

zalisa [80]

Answer:

B) Implement policies to encourage greater consumption.

Explanation:

The Paradox of thrift says that an increase in autonomous saving leads to a decrease in aggregate demand and thus a decrease in gross output which will, in turn, lower total saving due to that total saving may fall because of individuals' attempts to increase their saving, Therefore, to avoid the paradox of thrift policies to encourage consumption must be implemented.

5 0

3 years ago

Ellen Kelly Inc. had 31,300 shares of $.50 par common stock 10,000 shares of 5%, $20 par cumulative preferred stock and 5,000 sh

Serga [27]

Answer:

10,000 common stock.

The EPS = earnings per share = Earnings before tax divided by outstanding common stock in issue

4 0

3 years ago

When interested rates are high cost less money to borrow money true or false

Andrei [34K]

Answer:

That statements is false

Explanation:

When you borrow money, interest represent the additional amount that you need to give back to the creditor. For example let's say that you borrow $1,000 with 10% interest rate per year. After one year, you need to pay back the loan with additional $100 ($1,000 x 10%) for the creditor.

This means that when the interest rate is high, it will cost you more to borrow money.

7 0

3 years ago

The cost to produce tooth paste has increased by 1000%. This has caused the price to quadruple, but the demand has remained the

erica [24]

Answer:

Inelastic

Explanation:

In the given question,the cost to produce the toothpaste has increased, which led to the increase in the price of the toothpaste significantly. But there is no change in the demand of the toothpaste.

Hence, this product is inelastic.

In the inelastic demand, the demand of the product does not change with any variation in the price of the product.

6 0

3 years ago