Answer:
The answer is: The expected rate of return from this investment is 26.68%
Explanation:
We are given the following cash flows for this operation:
- Initial investment = -$24.50
- Cash flow 1 = $1.25 (dividend year 1)
- Cash flow 2 = $1.35 (dividend year 2)
- Cash flow 3 = $1.45 (dividend year 3)
- Cash flow 4 = $56.55 ($1.55 dividend year 4 + $55 stock's sales price)
Using an excel spreadsheet and the IRR function:
=IRR(value 1: value 5) =26.68%
where
- value 1 = -24.50
- value 2 = 1.25
- value 3 = 1.35
- value 4 = 1.45
- value 5 = 56.55
Answer:
Required return is 8.75%
Explanation:
Given,
FV (Face Value) is $1,000
PV (present Value) is computed as:
PV = FV × Price
= $1,000 × 101.4%
= $1,014
Nper (Number of years) is 8 years
PMT (Monthly payment) is computed as:
PMT = FV × Coupon rate
= $1,000 × 9%
= $90
r (Required return) is computed by using the excel formula:
=Rate(nper, pmt, pv, fv, type)
= Rate (8,90,-1014,1000,0)
= 8.75%
Answer:
Problem Recognition.
Information Search.
Evaluation of Alternatives.
Purchase Decision.
Purchase.
Post-Purchase Evaluation
Explanation:
1. Problem Recognition: This relates to the existence and realization of the <u>need gap</u> between what they have and what they want.
2. Information Search: This is the next stage where the consumer begins to search for how to close the need gap.
3. Evaluation of Alternatives: After searching for available information on potential way(s) to meet the existing need, the product of the search could reveal numerous alternatives from which a choice will be made after thorough evaluation
Purchase Decision: This is the point where the choice is made from the available alternatives to buy one or not to buy any at all.
Purchase: After the decision, the purchase is made
Post-Purchase Evaluation: After a purchase decision, it is imperative that the customer gives feedback on whether or not they are satisfied with the decision that was made or not, to buy the product.
Answer: debit to Dividends Payable.
Explanation:
When the dividend was declared in July 15, the dividend amount was debited to the Retained earnings to show that it was being taken from Retained earnings. It was then credited to Dividends payable to show that the company owed dividends to its shareholders.
On August 15, this liability will be paid off when the dividends are paid and so the Dividends Payable account will be debited to reflect this.
