Answer:
$75.01
Explanation:
Given:
- Call price (C): $4
- Put price (P): $2.5
- risk-free rate (r): 2% = 0.02
- Time: 1 year
- Exercise price (K): $75
Let Share price:
As per put-call party, we have the following equation:
- C + K = P+
<=> = C + K - P
<=> = 4 + 75* - 2.5
<=> = 1.5 + 73.51 = $75.01
So the the stock price is $75.01
Answer:
11.86%
Explanation:
First we need to calculate the return on equity(Re).
re = rf + B(rm-rf)
re = 0.03 + (1.4)*(0.11-0.03) => 0.142 or 14.2%.
Now the formula for WACC is,
WACC = (re * %of Equity) + ((rd * %of Debt)(1-tax rate))
Hence this is calculated as,
WACC = (0.70*0.142)+((0.30*0.08(1-0.20))
WACC = 11.86% or 0.1186.
Hope this helps. Goodluck.
Answer: the correct answer is a. includes a credit to Bad Debt Expense of $3,650.
Explanation: the Debt was not going to be paid but then the company received the money so it corresponds the credit to Bad Debt Expense of $3,650.
Answer:
The kind of decision style that Kendra adopted is the;
A- The AI decision style
Explanation:
Decision theory is a multi-disciplinary approach that can be used to arrive at decisions where the most beneficial option is considered in that context. Since decision theory is multi-disciplinary, it involves the utilization in many fields such as; psychology, philosophy, mathematics and statistics to evaluate the decision-making process. Decision-making is broad with various branches that deal with specific aspects, the three main branches of decision theory are; descriptive decision theory, prescriptive decision theory and normative decision theory. We will consider normative decision theory.
Normative decision theory utilizes a set of value to provide guidance to decision making. In this context, there are different styles of decision making that can be used, an example is the AI decision style. The AI decision style is a type of decision making that usually involves the leader acting alone. He/she makes a decision alone using the information available to them at that moment. This type of style is majorly beneficial in areas where the information about the decision is confidential in nature.