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Drupady [299]
3 years ago
14

The difference between average annual returns on common stocks and returns on long-term government bonds is called a:___________

_
Business
1 answer:
Anestetic [448]3 years ago
3 0

Answer:

Market risk premium.

Explanation:

The difference between average annual returns on common stocks and returns on long-term government bonds is called a market risk premium.

Basically, market risk premium is typically determined by taking the slope of a security market line (SML); which is used by economist as a graphical representation of the capital asset pricing model (CAPM).

Market premium risk is used to determine the quantitative measure of the extra return demanded by market participants for the increased risk.

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Which of the following inputs is normally considered to be variable in the short run?
Len [333]

Please help me! brainly.com/question/14319457

8 0
3 years ago
Rose Hill Trading Company is expected to have EPS in the upcoming year of $6. The expected ROE is 18%. An appropriate required r
Nesterboy [21]

Answer:

We know the company's ROE and plowback ratio, and we can use these 2 figures to find out the future growth rate of the company. In order to do this we need to multiply the ROE by plowback ratio.

0.18*0.7=0.126= 12.6%

We can also find the company's dividend, by (1- plowback ratio) we get how much percentage of the earning is the company distributing as dividends.

(1-0.7)= 0.3 which is the dividend payout ratio

Dividend= Dividend payout ratio *EPS

0.3*6=1.8

This dividend is the dividend which the company will pay in the upcoming year after which they will have a constant growth rate, so in order to find the intrinisc value now, we need to find the intrinsic value of the stock will be in the upcoming year using the upcoming years dividend and then discount that value by the required return of the stock to get the current years intrinsic value.

Now we can use the DDM formula to find the intrinsic value of the stock in the upcoming year.

The formula for DDM is D*(1+G)/(R-G)

D= 1.8

G= 0.126

R=0.14

1.8*(1+G)/0.14-0.126

=144.77

Discount it to find the present value

144.77/1.14

=128.5

The intrinsic value of the stock should be 128.5

Explanation:

7 0
3 years ago
question content areause this information for pierce company to answer the following question.on may 1, pierce company purchased
Marina86 [1]

On May 1, Pierce Company purchased $60,000 of Stanton Company's 12% bonds at 100 plus accrued interest of $2,400. On June 30, Pierce received its first semiannual interest. On February 1, Pierce sold $50,000 of the bonds at 103 plus accrued interest.

The journal entry Pierce will record on February 1 will include the total proceeds from the February 1 sale credit to Gain on Sale of Investments for $1,500

(this would also include a

Dr: Cash for $51,500

Cr: Investment-Stanton Company for $50,000)

Interest is the monetary fee for the privilege of borrowing money, usually expressed as an annual rate (APR). Interest is the amount a lender or financial institution receives for lending money.

In finance and economics, interest is a payment made by a borrower or deposit-taking financial institution to a lender or depositor in excess of the repayment of principal at a specified rate. It is different from a fee that a borrower can pay to a lender or a third party. Interest is usually given as an annual percentage of the loan amount. This percentage is called the interest rate on the loan. For example, if you deposit money in a savings account, the bank will pay you interest. Banks pay you to hold your money and use it to invest in other transactions.

Learn more about   interest here

brainly.com/question/25793394

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5 0
2 years ago
Match the types of agreements to their descriptions. Answer choices are will,living will,trust,prenuptial agreement
Roman55 [17]

A will has legal impact after you have passes away and has to be filed with the court.

A living will is similar to a regular will be takes effect while you are still alive to figure out where your assets should be placed.

A trust is an agreement that allows a third party to hold the assets on behalf of a beneficiary.

A prenuptial agreement is an agreement made before a marriage that explains what should happen to their assets in the event their marriage does not last. This is common in famous people due to the amount of money they have.

4 0
4 years ago
Read 2 more answers
Managers and leaders perform many tasks as a result of their goals and objectives. Even though many tasks may be completed as a
uysha [10]

Answer:

a). Paul - Planning

b). Santiago - Organizing

c). Mathew - Planning

d). Chioe - Organizing

e). Kelly Tomasz - Leading

f). Ava - Controlling

g). Michelle - Organizing

Explanation:

Planning is described as the process of setting up the goals for the organization and formulating a course of action to achieve the intended goals.

Organizing is followed by planning which aims to assign the resources in a specific manner to ensure the effective accomplishment of the goal.

Leading is the process of providing guidance or direction to the staff, employees, and workers and keeps them motivated to ensure the smooth functioning of the process and achievement of optimum output.

Controlling is the last step in which the performances are governed and assessed as per the standards to find any variation.

8 0
4 years ago
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