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blagie [28]
3 years ago
7

Arbitrage means taking advantage of temporary differences in market prices to make a profit. Assume two real estate companies, A

and B, both operate in New York area and focus on office properties. You have determined that Company A's shares have an intrinsic value of $20 per share but are trading at $22 per share, while Company B's shares are worth $25 per share but are trading at $22 per share. What would a rational investor (or an arbitrageur) do to take advantage of this price difference (no short-selling constraint and transaction fee)
Business
1 answer:
Nadusha1986 [10]3 years ago
7 0
Please help me with my questions
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Sales $ 100,000 Operating expenses $ 94,000 Operating assets $ 40,000 Stockholder's equity $ 25,000 Cost of capital 10 % What is
Alexxandr [17]

Answer:

15%

Explanation:

Given that :

Operating expenses = $94000

Operating assets = $40,000

Sales = $100,000

Return on investment = profit / operating asset

Profit = sales - operating expenses

Profit = (100,000 - 94000) = $6000

Return on investment = $6000 / $40000 = 0.15

= 0.15 * 100% = 15%

8 0
3 years ago
1. Credit profile shows. a. only your credit history. b. your overall credit score. c. Many parts such as credit history, debts,
stiv31 [10]

1. The correct answer is C. Credit profile is able to show many payment history. Credit history , payment history, and debts.

Credit profile is where you can find what you are being owed, all the debts made and the amount you have paid.


2. Correct answer is C. 35%.

35% of the correct score. This is the percentage which shows the credit score.


3. The correct answer is A. 280 points.

For a payment history to be known the perfect score will be ranging at 280 points.

6 0
3 years ago
Read 2 more answers
A company produces 1 comma 0001,000 packages of dog treats per month. The sales price is $ 6.00$6.00 per pack. Variable cost is
snow_tiger [21]

Answer:

$ 6.56

Explanation:

Sales price per unit = $6

Sales price for 1000 units:

= $6 × 1000 units

= $6,000

Contribution = Sales - Variable Cost

                     = $6,000 - ($1.50 per unit × 1,000 units)

                     = $6,000 - $1,500

                     = $4,500

Operating Cost = Contribution - Fixed cost

                           = $4,500 - $1,800

                           = $2,700

For further processing:

Variable Cost = $ 1.70 per unit

Variable cost for 1000 units:

= 1000 × 1.70

= $1,700

Fixed Cost = $1,800 + 20% × $1,800

                  = $1,800 + $360

                  = $2,160

Let the sale price per unit be "x"

Operating Income = Sales - Variable Cost - Fixed Cost

2,700 = (1000 units × x) - $1,700 - $2,160

2,700 = 1000x - $3,860

1000x = 6,560

x = $6.56

8 0
4 years ago
The appropriate discount rate for the following cash flows is 7.38 percent per year.
Kaylis [27]

Answer:

Present value = $7107.76379 rounded off to $7107.76

Explanation:

The present value of cash flows can be calculated by discounting each of the cash flow back to today's value and summing them up. The present value of the cash flows can be calculated using the following formula,

Present Value = CF1 / (1+r)  +  CF2 / (1+r)^2  +  ....  +  CFn / (1+r)^n

Where,

  • n is the total number of periods
  • CF represents the cash flow in each year
  • r is the discount rate

Present value = 2480 / (1+0.0738)  +  0  +  3920 / (1+0.0738)^3  +  

2170 / (1+0.0738)^4

Present value = $7107.76379 rounded off to $7107.76

6 0
3 years ago
If a perpetual inventory system is in use _____. a physical inventory count is not required because the Inventory account is upd
marshall27 [118]

Answer:  a physical inventory count should be taken at least annually

Explanation: That an inventory is perpetual does not discount the need for taking physical inventory at least once a year. This is important because it helps in the identification of shrinkage or shortages and to also test the accuracy of the perpetual records under use. Now, a perpetual inventory is a kind of inventory that tracks and records continuously, items as they are added to or subtracted from the inventory thus keeping it updated and aids in keeping the track of the cost of goods bought and sold.

6 0
3 years ago
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