Answer:
$23.6 per share
Explanation:
Given that,
Total common equity = $5,500,000
Shares outstanding = 250,000
Net income = $525,000
Dividends paid out = $125,000
Total value at the end:
= Total common equity + Net income - Dividends paid out
= $5,500,000 + $525,000 - $125,000
= $5,900,000
Therefore,
Book value per share at 2014 year end:
= Total value at the end ÷ No. of shares outstanding
= $5,900,000 ÷ 250,000
= $23.6 per share
Answer: Keep your account open and you will earn more on Interest you've already earned
Explanation:
Since Tom's investment account at his bank has a compounding interest, the best advice that'll be offered to Tom is to keep the account open and he will earn more on Interest than what he has already earned.
It should be noted that compound interest makes ones money grow faster. The reason for this is due to the fact that the interest is calculated based on the accumulated interest that the individual has earned over time and the original principal.
Therefore, it isn't advisable for Tom to withdraw his money or ask the bank to compound the interest less frequently but rather, he should keep the account open as he'll earn more interest.
The effects of leverage
Leverage, however, will increase the volatility of a company's earnings and cash flow. In finance, the term is used to describe the amount of cash (currency) that is generated or consumed in a given time period. There are many types of CF, as well as the risk of lending to or owning said company
Answer:
d. substitution bias.
Explanation:
Price changes from year to year are not proportional, and consumers respond to these changes by altering their spending patterns. The problem this creates for inflation calculations is called substitution bias.
A problem with the Consumer Price Index (CPI) arises from the singular fact that, when the price level of a product becomes relatively less expensive or lower, consumers tend to buy more quantity of the product and consequently, a lesser quantity of goods that are relatively more expensive.
Hence, their spending pattern changes with respect to the prices but it's not completely adjusted with the Consumer Price Index (CPI), thus, making the inflation rate to differ because of the problem of substitution bias.
