The statement "bikes shortage should be developed" is correct.
The following information should be considered:
- In the case when the firm wants to sell the product at a lower price so there should be a product shortage.
- The demand and supply should not achieve at equilibrium.
- There is no inelastic demand that should be developed.
- The no of bikes generated should not be increased.
Therefore we can conclude that The statement "bikes shortage should be developed" is correct.
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Answer:
(A) Rate earned on stockholder's equity=15%
(B) Rate earned on common stockhloder's equity= 16%
Explanation:
A company reports the following profitability analysis
Net income of $375,000
Preferred dividend of $75,000
Average stockhloder's equity of $2,500,000
Average common stockhloder's equity of $1,875,000
(A) The rate earned on stockholder's equity can be calculated as follows
= Net income/Average stockholders equity
= $375,000/$2,500,000
= 0.15×100
= 15%
(B) The rate earned on common stock holder's equity can be calculated as follows
= Net income-Preferred dividend/Average common equity
= $375,000-$75,000/$1,875,000
= $300,000/$1,875,000
= 0.16×100
= 16%
Hence the rate earned on stockholder's equity and common stockhloder's equity is 15% and 16% respectively.
The type of account that typically offers no interest is the checking account.
<h3>What is checking account?</h3>
The checking account is the another name of the transaction account. This type of account is also known as the deposit account that is held by some financial institutions.
This type of bank account permitted their customers to easily deposit and withdraw money for daily transactions. This type of account is not take any interesrt for their services.
Therefore, the checking account offers no interest to its customers.
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Answer:
Based on the calculation made, the indicated value is $3,889.86014
Explanation:
Using direct capitalization method, indicated value can be calculated using the formula below:
Value = Annual net operating income NOI/Capitalization rate
= $44500/11.44%
Value= $3,889.86014
Based on the calculation made above, the indicated value is $3,889.86014.
Answer:
B) Using a market multiple assumes that the target company is mispriced, while comparable companies are correctly priced.
Explanation:
Market Multiple, also known as trading multiples, is used to compare two financial measures, to determine the value of a company. It is another name for Price to Earnings Ratio (also called P/E Ratio).
Using the market multiple approach, investors can determine whether stocks in their portfolios will increase or decrease in price through the next term. Investors may then buy or sell stocks in order to maximize their expected gains calculated.
