Answer:
The answer is: 2.98%
Explanation:
The dividend yield for the stock during the purchase year can be calculated using the following formula:
- dividend yield year A = dividend year A / stock price year A
In this case year A is the purchase year.
Dividend yield = $1.55 / $52 = 0.0298 or 2.98%
Hope this helps Accretion is a term used in accounting for bonds and accretion is required when a bond is purchased at a discount. Bonds are issued with a face amount (par value) of $1,000, or a multiple of $1,000. The investor receives $1,000 at maturity, and the interest rate on the bond is based on the $1,000 face amount.<span>
</span>
Answer:
The bond should sell for a price of $59.74 today.
Explanation:
Zero Coupon Bond is a bond which does not offer any interest payment but it is issued at deep discount amount from the face value of the bond.
Price of Zero Coupon Bond =
F = Face / Par Value of Bond = $1,000
r = rate of interest = 11%
n = number of years = 27 years
Price of Bond =
Price of Bond = $59.74
As Zero coupon bond does not offer any discount so, it is valued much below the par value.
Answer: The gradient of income growth is $12,59,741.59. This means that income must rise by $12,59,741.59 each year.
We follow these steps to arrive at the answer:
<h3><u>1. Calculating the total value of earnings after 15 years</u></h3>
We calculate the Future Value of the investment as follows:
This represents the total of revenues earned over 15 years from the investment.
<h3><u>2.Calculating the gradient</u></h3>
Since income increases linearly over 15 years, we can consider year 3 earnings as the base. Let the income increase in year 4 by x. Since income increases yearly, we can calculate income in each year as follows
Year Revenues
1 0
2 0
3 250000
4 250000 + x
5 250000 + 2x
6 250000 + 3x
7 250000 +4x
8 250000 + 5x
9 250000 + 6x
10 250000 + 7x
11 250000 + 8x
12 250000 + 9x
13 250000 + 10x
14 250000 + 11x
15 <u> 250000 + 12x</u>
Total 32,50,000.00 + 78x
Now we equate the values in steps 1 and above to find 'x' the gradient
The interest rate is the price paid for use of a FINANCIAL ASSET. Financial asset is the answer to the question. Interest rate is the fee that a borrower must pay the lender for the over time usage of the financial asset the borrower received.