Hi, you've asked an incomplete question. However, I provided some explanation.
<u>Explanation:</u>
Note, in the stock/asset trading market, the term <em>'stock/asset is overvalued' </em>is used when the worth of a particular asset or stock is overestimated; in other words having a stock price that is too high considering the projects/company's usefulness.
Hence, the journalist's comments may have been based on this observation.
Answer:
C) $4,000
Explanation:
To calculate economic profit we can use the following formula:
economic profit = total revenue - (accounting costs + implicit costs) = (total revenue - accounting cost) - implicit costs
where:
- accounting profit = total revenue - accounting cost = $50,000
- implicit costs: ($20,000 x 5%) + $45,000 = $1,000 + $45,000 = $46,000
economic profit = $50,000 - $46,000 = $4,000
Answer:
True
Explanation:
STRIPS are zero coupon bonds, and the advantage of them is that they allow an investor to know exactly how much money they will receive at a future date.
The investor purchases the STRIPS at a discount value, which we are not told here. E.g. assuming that the discount rate is 5% (similar to (4), the price of the STRIPS = $50,000 / (1 + 5%)⁶ = $37,311.
Answer:
Consider the following calculations
Explanation:
The price per share is computed as shown below:
Present value of equity is computed as follows:
= $ 10 million / 0.13
= $76,923,076.92
Now we shall divide it by the number of shares to get the price per share
= $76,923,076.92 / 5,000,000
= $ 15.38 per share
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