1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
svetoff [14.1K]
2 years ago
10

The current spot price of a stock is $30 and the risk-free rate for all maturities (with continuous compounding) is 10% per annu

m. It is known that the stock will pay a cash dividend of $2 at the end of the first year and a cash dividend of $3 at the end of the second year. What is the three-year forward price of the asset
Business
1 answer:
JulijaS [17]2 years ago
8 0

Answer:

$34.74

Explanation:

Three year forward Rate = Spot Rate * e^(10%*3) -Dividend Year 1 *e^(10%*2) -Dividend Year 2 * e^(10%*1)

Three year forward Rate = 30*e^(10%*3) - 2*e^(10%*2) - 3*e^(10%*1)

Three year forward Rate = 30*1.3498588 - 2*1.2214028 - 3*1.1051709

Three year forward Rate = 40.495764 - 2.4428056 - 3.3155127

Three year forward Rate = 34.7374457

Three year forward Rate = 34.74

Thus, the three-year forward price of the asset is $34.74

You might be interested in
What is the return on common stockholdersâ equity based on the following: Beginning Common Stockholdersâ Equity: $10,317,000 End
Slav-nsk [51]

Answer:

13.28%

Explanation:

return on stockholders' equity = net income after taxes and preferred stock dividends / average stockholders' equity

  • net income = $1,429,000
  • preferred stocks dividends = 8,000 stocks x $75 x 6% = $36,000
  • average stockholders' equity = ($10,317,000 + $10,662,000) / 2 = $10,489,500

return on stockholders' equity = ($1,429,000 - $36,000) / $10,489,500 = 13.28%

5 0
3 years ago
Which of the following represents an increase in living standards over the past century? Check all that apply. Increased human a
pashok25 [27]

Answer:

Medical breakthroughs enable people to enjoy better healthcare nowadays.

Explanation:

An increase in living standard means that the lives of people are better off.

Advances in medicine have made it possible to find cure to various diseases. This improves standard of living.

Increased pollution of air and water and decline of dollar value have negative effects on living standard.

Pollution affects human health negatively and can cause diseases which negatively affect standard of living. Also, pollution can cause floods and other environmental disasters. Floods can displace people from their homes and this affects standard of living negatively.

Decrease in dollar value has made items more expensive.

I hope my answer helps you

7 0
3 years ago
If the purpose of a licensing statute is to raise revenue, a contract with an unlicensed professional may be enforceable.
pishuonlain [190]

If the purpose of a licensing statute is to raise revenue, a contract with an unlicensed professional may be enforceable is TRUE.

Revenue raising statutes. these are licensing statutes enacted to elevate money for the government. unlicensed persons can put in force contracts and recover for rendering services.

Specialists to gain a license, authorities has some say over who can carry out which jobs as well as how many people can perform those jobs. 2. the second main purpose of licensing statutes is extra intently related to the general public interest.

Business licenses preserve corporations accountable for their sports and conduct and guard the general public's fitness and safety. professional licenses imply the quantity of competence and know-how that a specific professional possesses.

Learn more about licensing statute here:- brainly.com/question/15443448

#SPJ4

3 0
1 year ago
Match the following terms to their definition: 1. expected value 2. liquidity 3. fixed assets 4. point of sales terminals 5. sel
koban [17]

Answer:

1.A representative quantity from a probability distribution arrived at by multiplying each outcome times the associated probability and summing up the products.

2.The relative convertibility of short-term assets to cash.

3.Assets that are assumed to be long term in nature.

4. Computer terminals in retail stores that may be used for inventory control or other purposes.

5. Assets that are converted to cash within the normal operating cycle of the firm.

6.Financing provided by sellers or suppliers in the normal course of business.

7.Equal monthly production used to smooth out production schedules and employ manpower and equipment more efficiently.

Explanation:

8 0
3 years ago
You are asked to complete a short survey after attending a free comedy show on campus. If the first question asked you to give a
klio [65]

Answer: A Semantic Differential Scale question.

A rating scale question is a type of a closed-end question in which the person who takes the survey assess the question on a given scale.  

A rating scale may be a Likert scale or a Semantic differential scale.

In a Likert scale the choices usually range between strongly agree and strongly disagree.  

In a semantic differential scale, however, each end of the scale has opposing sentences. In the question above, the five-point scale ranges from “hilarious” to “not funny”. Since this scale has opposing sentences at each end, this question is a semantic differential scale question.


6 0
3 years ago
Other questions:
  • Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2003, an auction
    7·1 answer
  • When conducting a financial analysis of a firm, financial analysts:?
    6·1 answer
  • After graduation from college, you will receive a substantial increase in your income from a new job. If you decide that you wil
    12·1 answer
  • Jana has spent the last year traveling to different operations for her company. She visited factories in Mexico and Thailand, a
    7·1 answer
  • The future value and present value equations also help in finding the interest rate and the number of years that correspond to p
    10·1 answer
  • If nothing changes except that producers sell more of a good or service when the price increases, we know this is an example of
    14·1 answer
  • The marketing team of Under Armour has come up with a strategy to advertise their shoes as a product that makes walking and runn
    11·1 answer
  • Which of the following editors would handle a copyright issue?
    15·1 answer
  • At the beginning of Year 1, a company reported a balance in common stock of $164,000 and a balance in retained earnings of $64,0
    7·1 answer
  • Alternative or non-traditional assessments are become more popular among teachers. One type of alternative assessment is called
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!