Answer:
5.39%
Explanation:
Given that,
Bond that pays interest annually yields a rate of return = 7.50 percent
Inflation rate for the same period = 2 percent
Real rate = [(1 + nominal rate) ÷ (1 + inflation rate)] - 1
Real rate = [(1 + 0.0750) ÷ (1 + 0.02)] - 1
= (1.075 ÷ 1.02) - 1
= 1.0539 - 1
= 0.0539 or 5.39%
Therefore, the real rate of return on this bond is 5.39%.
Answer:
The correct answer would be option C, He will be able to gain knowledge and support from the hotel business to run the franchise.
Explanation:
Franchise is basically a contract between two parties in which one of the party who is owning the business is ready to sell his business rights to use its name and products to the other party. The other party can open the same business with the same name and products or services and run that business. In this type of contract, a continuous help and support is given to the franchisee to run the business. So if John being an entrepreneur wants to enter into the franchise contract, then he will surly be able to gain knowledge and support from the hotel business to run the franchise.
Answer:
Correct option is (b)
Explanation:
Price elasticity of demand is the law that states that proportion of percentage change in demand due to percentage change in price only and not any other factors. Demand is perfectly elastic if quantity demanded changes tremendously with change in price. Demand is inelastic if there is no change in quantity demanded with increase in price.
Here, Get smart university plans to increase tuition fees assuming that there will be no change in demand for the seats offered by the university due to increase in price. So, it assumes that demand is inelastic.
Answer:
The answer is B
Explanation: This because when we consume something it goes while if we do not the price goes down.
Answer:
Stock Price in 5 years: $97.94. Stock Price Today: $55.575
Explanation:
A pay-out ratio is computed by dividing dividends per share over earnings per share. Meanwhile, PE or Price-Earnings Ratio is computed by dividing the market value of stocks over earnings per share. Thus, using the pay-out ratio formula, the earnings per share is 2.925 ($1.17/40%) and using the PE ratio formula, the market price of stocks today is $55.575 (19 x 2.925). After 5 years, multiplying 1.17 and 12% rate raised to the 5th power, the dividend will amount to $5.1548. Using pay-out ratio, earnings per share is 5.1548 ($2.0619/40%) and the market price of stock after 5 years is $97.94 ($5.1548 x 19).
