The rate of return if the price of Telecom stock goes up by 6% during the next year is 8.00%
What is rate of return?
The rate of return on the bullish strategy is the return on the stock minus the interest on the borrowing.
The share price increase of 6% means the total amount invested would increase by 6%
new value of investment=$16000*(1+6%)
new value of investment=$16,960
interest on borrowing=4%*$8000
interest on borrowing=$320
Gain on investment=new value of investment-initial investment-interest on borrowing
Gain on investment=$16,960-$16,000-$320
Gain on investment=$640
rate of return=gain on investment/equity investment
rate of return=$640/$8000
rate of return=8.00%
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Answer:
$17,000
Explanation:
Fair market value before casualty is $17,000 while Fair market value after casualty is none. The starting point for the calculation of loss deduction will be based on the fair market value before casualty which is $17,000.
Answer:
Explanation:
Present value is calculated as the discounted sum of either a fixed amount or a series of payments in the future, at a given interest rates.
For example, at an interest of 5%, $100 in 10 years will be valued at $100 / 1.05^10 = $61.39 today
Jan. 1, 2013:
Initial investment = (100 shares)*($30/share) = $3,000.
End of 2013:
Dividend collected = ($2/share)*(100 shares) = $200
End of 2014:
Dividend collected = ($3/share)*(100 shares) = $300
End of 2015:
Dividend collected = ($4/share)*(100 shares) = $400
Returns::
From sales of 100 shares = ($33/share)*(100 shares) = $3,300
From dividends = 200 + 300 + 400 = $900
Total returns = 3,300 + 900 = $4,200
Realized returns = Total returns - Initial inestment
= 4200 - 3000
= $1,200
Answer: $1,200
I would say that b is the best answer
