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aliya0001 [1]
3 years ago
14

The Closed Fund is a closed-end investment company with a portfolio currently worth $260 million. It has liabilities of $2 milli

on and 6 million shares outstanding. a. What is the NAV of the fund? (Round your answer to 2 decimal places.) b. If the fund sells for $40 per share, what is its premium or discount as a percent of NAV? (Input the amount as a positive value. Round your answer to 2 decimal places.)
Business
1 answer:
attashe74 [19]3 years ago
4 0

Answer and Explanation:

The computation is given below:

NAV = (Total value - Liabilities) ÷ Number of shares outstanding

= ($260M - $2M) ÷ 6M

= $258M ÷ 6M

= $43

b. The premium or discount is  

= (Market price - NAV) ÷ NAV

= ($40 - $43) ÷ $43

= -$3 ÷ $43

= -0.06976 or -6.98%

So here the fund should be sold at 6.98% discount

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Calculating the geometric and arithmetic average rate of​ return) Marsh Inc. had the following​ end-of-year stock prices over th
KatRina [158]

Complete Question:

Marsh Inc. had the following​ end-of-year stock prices over the last five years and paid no cash​ dividends:

Time     Marsh

1              ​$99

2             141

3             121

4             88

5             99

a. Calculate the annual rate of return for each year from the above information.

b. What is the arithmetic average rate of return earned by investing in​ Marsh's stock over this​ period?

c. What is the geometric average rate of return earned by investing in​ Marsh's stock over this​ period?

d. Considering the beginning and ending stock prices for the​ five-year period are the​ same, which type of average rate of return​ (the arithmetic or​ geometric) better describes the average annual rate of return earned over the​period?

Answer:

Marsh Inc.

a. annual rate of return for each year

Year

2             42. 4%

3             -14.2%  

4             -27.3  

5             12.5

b. The arithmetic average rate of return earned by investing in​ Marsh's stock over this​ period is:

= 3.35%

c. The geometric average rate of return earned by investing in​ Marsh's stock over this​ period is:

= -0.7502%

d. Considering the beginning and ending stock prices for the​ five-year period are the​ same, the geometric type of average rate of return​ better describes the average annual rate of return earned over the ​period.

Explanation:

a) Data and Calculations:

Time     Marsh   ARR

1              ​$99      

2             141       42. 4% ($42/$99 * 100)

3             121       -14.2% (-$20/$141 * 100)

4             88        -27.3 (-$33/$121 * 100)

5             99        12.5 ($11/$88 * 100)

Sum of ARR =   13.4%

Arithmetic mean = 3.35% (13.4%/4)

Geometric mean = {(1 + 0.424 * 1 - 0.142 * 1 - 0.273 * 1 + 0.125)∧1/4} - 1

= {(1.424 * 0.858 * 0.727 * 1.125)∧1/4} - 1

= {(0.99927)∧1/4} - 1

= 0.2498 - 1

= -0.7502

< 0

3 0
3 years ago
Excerpts from Huckabee Company's December 31, 2018 and 2017, financial statements are presented below: 2018 2017 Accounts receiv
ICE Princess25 [194]

Answer:

The Huckabee's 2018 average collection period (rounded) is 5 times

Explanation:

To find out the average collection period for Huckabee's 2018, we have to use the formula of the average collection period which is presented below:

Average collection period = Net credit sales ÷ Average accounts receivable

where,

Net credit sale is $400,000

And, the average accounts receivable is calculated by applying the equation which is shown below:

= (2017 accounts receivable + 2018 accounts receivable) ÷ 2

=  ( $72,000 + $80,000 ) ÷ 2

= $76,000

Now apply the above values to the formula

So, the answer would be equal to

= $400,000 ÷ $76,000

= 5.26 times

The other things like opening balance of merchandise inventory and cost of goods and  the ending balance of merchandise inventory and cost of goods is irrelevant. Thus, it is not to be considered.

Hence, Huckabee's 2018 average collection period (rounded) is 5 times

5 0
3 years ago
Which of the following statements is (are) true regarding product costing?(A) Twenty cans of paint that are 25% full are equival
MrRa [10]

Answer:

B is the correct option.

Explanation:

Product costing refers to the cost incurred for creating a product. It includes the materials, labor, factory overhead and consumable production supplies. It can also be defined as the labor cost required for delivering the service and in this case, its cost also includes the costs related to compensation, payroll taxes, and employee benefits. The cost of a product on a unit basis is calculated by adding the cost of total direct labor, materials, consumable supplies and total allocated overhead divided by the total number of units.

6 0
2 years ago
Horizontal channel conflict can arise for a variety of reasons. An example would be a toy manufacturer selling its toys through
svet-max [94.6K]

Answer:

a. Undifferentiated products and variable prices in the various channels.

Explanation:

Horizontal Channel Conflicts arises when there is disagreement between two or more members of the channel. If the toy manufacturer sells toys to toy store and department stores, a possible reason for disagreement could be on variable price among the two channels.

8 0
3 years ago
Read 2 more answers
Suppose a tire manufacturer wants to set a mileage guarantee on its new XB 70 tire. Tests revealed that the tire's mileage is no
kogti [31]

Answer:

The manufacturer should announce a guaranteed mileage of 44528 miles

Explanation:

Problems of normally distributed samples are solved using the z-score formula.

In a set with mean \mu and standard deviation \sigma, the zscore of a measure X is given by:

Z = \frac{X - \mu}{\sigma}

The Z-score measures how many standard deviations the measure is from the mean. After finding the Z-score, we look at the z-score table and find the p-value associated with this z-score. This p-value is the probability that the value of the measure is smaller than X, that is, the percentile of X. Subtracting 1 by the pvalue, we get the probability that the value of the measure is greater than X.

In this problem, we have that:

\mu = 47900, \sigma = 2050

What guaranteed mileage should the manufacturer announce

Only until the 5th percentile will have to be replaced, which is the value of X when Z has a pvalue of 0.05. So it is X when Z = -1.645.

Z = \frac{X - \mu}{\sigma}

-1.645 = \frac{X - 47900}{2050}

X - 47900 = -1.645*2050

X = 44528

The manufacturer should announce a guaranteed mileage of 44528 miles

6 0
3 years ago
Read 2 more answers
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