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Alexandra [31]
3 years ago
6

Your aunt has promised to give you $5,000 when you graduate from college. You expect to graduate three years from now. If you sp

eed up your plans to enable you to graduate two years from now, the present value of the promised gift will: Multiple Choice be less than $5,000. remain constant. decrease. Incorrect equal $5,000. increase
Business
1 answer:
ikadub [295]3 years ago
3 0

Answer:

The present value of the promised gift will:

be less than $5,000.

Explanation:

The present value of $5,000 to be received in three years' time from today is less than $5,000 received.  This is explained by the time value of money concept.  If the $5,000 gift is discounted to today's value, using a discount factor of 0.751 (10% in three years' time), it would be $3,755 ($5,000 * 0.751).  This means that $5,000 received in year 3 is less than $5,000 received today.

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The common stock of Serenity Homescapes has a beta of 1.21 and a standard deviation of 17.8 percent. The market rate of return i
3241004551 [841]

Considering the available information in the question, the <u>cost of equity</u> for this firm is "<u>0.1566</u>."

The <u>cost of equity</u> for the firm is expressed below:

RE = Rf + β × ( E (RM) − Rf );

Here, the RE is the

Rf => risk-free => 3.2 percent;

β => beta => 1.21;

E (RM) => market rate of return => 13.5 percent;

Thus, we have the following formula to compute:

RE = 0.032 + 1.21 × (0.135 − 0.032)

RE =<u> </u><u>0.1566</u>

Cost of equity is a term that is used I'm describing the rate of return firms need for business investment.

In another way, the Cost of equity depicts the rate of return that an individual needs for an equity investment.

Hence, in this case, it is concluded that the correct answer is "<u>0.1566</u>."

Learn more here: brainly.com/question/24242733

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2 years ago
Question 6 (multiple choice)
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It may be A but if it isn't I'm sorry
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bixtya [17]

Answer:

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3 0
3 years ago
PLEASE HELP! I need to know what to put in the blank
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Explanation:

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