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bearhunter [10]
3 years ago
15

The consumer price index was 200 in 2008 and 190 in 2009. The nominal interest rate during this period was 4.5 percent. What was

the real interest rate during this period
Business
1 answer:
leva [86]3 years ago
3 0

Answer:

the real interest rate is 9.5%

Explanation:

The computation of the real interest rate is shown below:

But before that inflation rate need to be determined

Inflation rate is

= [CPI this year - CPIlast year] ÷ CPI last year

= {(190 - 200) ÷ 200} ×  100

= -0.05 × 100

i = -5%

Now the real interest rate is

real interest rate = nominal interest rate - inflation rate

= 4.5% - (- 5%)

= 9.5%

Hence, the real interest rate is 9.5%

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Cooperton Mining just announced it will cut its dividend from $4.22 to $2.63 per share and use the extra funds to expand. Prior
erastova [34]

Answer:

The expected share price=$20.07

Explanation:

Step 1: Calculate the price/earnings to growth ratio(PEG) ;

PEG ratio=(Price/EPS)/EPS growth

where;

Price=Price per share

EPS=earnings per share=share price

EPS growth=share price growth

In our case;

Price per share=$4.22

Share price=$48.83

Share price growth rate=3.1%=

Replacing;

PEG ratio=(4.22/48.83)/3.1

PEG ratio=0.0279

Step 2: Calculate share price

PEG ratio=(Price per share/share price)/share price growth

where;

PEG ratio=0.0279

Price per share=$2.63

Share price=x

share price growth rate=4.7%

Replacing;

0.0279=(2.63/x)/4.7=2.63/4.7 x

4.7 x×0.0279=2.63

x=2.63/(4.7×0.0279)

x=20.07

The expected share price=$20.07

3 0
3 years ago
You are valuing a company that is projected to generate a free cash flow of $16 million next year, growing at a stable 2.8% rate
Step2247 [10]

Answer:

$4.3

Explanation:

For computing the share price, first, we have to compute the Value of firm which is shown below

= Free cash flow ÷ (cost of capital - growth rate)

= $16 million ÷ (10.6% - 2.8%)

= $16 million ÷ 7.8%

= $205.12 million

Now find the equity value which equals to

= Value of firm - debt value + cash

= $205.12 million - $23 million + $8 million

= $190.12 million

And, the number of outstanding shares is 44 million

So, the price per share would equal to

= Equity value ÷ number of outstanding shares

= $190.12 million ÷ 44 million shares

= $4.3

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Anna007 [38]

Answer:

home inventory

Explanation:

8 0
3 years ago
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Advocard [28]

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3 years ago
Why is it taking so long for my taxes to be accepted?.
OLga [1]

Answer:

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Explanation:

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