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2 years ago

Which best describes how an investor makes money from an equity investment?

Business

2 answers:

Alexxx [7]2 years ago

5 0

By selling the asset for a profit

Alex787 [66]2 years ago

5 0

Answer:

Explanation:

got it right on test

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An investment offers $6,600 per year for 10 years, with the first payment occurring one year from now. If the required return is

Reika [66]

Answer:

Instructions are listed below

Explanation:

Giving the following information:

An investment offers $6,600 per year for 10 years, with the first payment occurring one year from now. The required return is 5 percent.

A) FV= {A*[(1+i)^n-1]}/i

FV= {6600*[(1.05^10)-1]}/0.05= $83,014.09

PV= FV/(1+i)^n= 83,014.09/1.05^10= $50,063.39

B) n=35

FV= {6600*[(1.05^35)-1]}/0.05= $596,114.03

PV= 596,114.03/1.05^35= $108,069.69

C) n=65

FV= {6600*[(1.05^65)-1]}/0.05= $3,014,866.87

PV= 3,014,866.87/ 1.05^65= $126,463.06

D) PV= 6600/0.05= $132,000

3 0

3 years ago

2 ways in which busisnsses may act ethically

hram777 [196]

Businesses can act ethically by being honest and fair

4 0

3 years ago

Consolidated Enterprises issues $1 million face value, five-year bonds with a coupon rate of 6.0 percent. At the time of issuanc

valentinak56 [21]

Answer:

$1,035,459.51

Explanation:

First we must determine the issuing value:

cash flow 1 = $60,000
cash flow 1 = $60,000
cash flow 1 = $60,000
cash flow 1 = $60,000
cash flow 1 = $1,060,000

using an excel spreadsheet to calculate the bond's price with a discount value of 5%:

the bonds were sold at $1,043,294.77

the effective interest expense = bond's price x market interest = $1,043,294.77 x 5% = $52,164.74

bond's value = bond's price - (coupon payment - effective interest) = $1,043,294.77 - ($60,000 - $52,164.74) = $1,035,459.51

8 0

3 years ago

svlad2 [7]

Answer:

Allocative efficiency is about distributing or allocating resources in the best possible manner. E.g. in order to fight the current pandemic, more resources ($) is allocated to different health care institutions.

Productive efficiency is about how a company or a person uses the resources that it has in order to produce the greatest amount of benefits at the lowest possible cost. E.g. in a hospital, if a doctor is able to treat 15 patients per day, his/her productive efficiency will be higher than another doctor that only treats 10 patients per day.

3 0

3 years ago

Bond valuationlong dashSemiannual interest Find the value of a bond maturing in 4 years, with a $1 comma 000 par value and a c

algol [13]

Answer:

824.28

Explanation:

Market price of a bond is the total sum of discounted coupon cashflow and par value at maturity. This is a 4-year bond with semi-annual payment so there will be 8 coupon payment in total. Let formulate the bond price as below:

Bond price = [(Coupon rate/2) x Par]/(1 + Required return/2) + [(Coupon rate/2) x Par]/(1 + Required return/2)^2 + ... + [(Coupon rate/2) x Par + Par]/(1 + Required return/2)^8

Putting all the number together, we have

Bond price = [(4.5%) x 1000]/(1 + 7.5%) + [(4.5%) x 1000]/(1 + 7.5%)^2 + ... + [(4.5%) x 1000 + 1000]/(1 + 7.5%)^8

= 824.28

7 0

2 years ago