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3 years ago

The geometric average annual return for a large capitalization stock portfolio is 10% for ten

Business

1 answer:

34kurt3 years ago

6 0

Answer:

B) 8.65%

Explanation:

Geometric Average Return = [(1 + r1) * (1 + r2) * - - - - - * (1 + rN)]1/N - 1

Geometric Average Return = [(1 + 0.10)^10 * (1 + 0.06)^5]^1/15 - 1

Geometric Average Return = [1.10^10 * 1.06^5]^1/15 - 1

Geometric Average Return = [2.59374*1.33823]^1/15 - 1

Geometric Average Return = (3.471021)^1/15 - 1

Geometric Average Return = 1.08650188155 - 1

Geometric Average Return = 0.08650188155

Geometric Average Return = 8.65%

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During the current year, Comma Co. had outstanding: 25,000 shares of common stock; 8,000 shares of $20 par, 10% cumulative prefe

wlad13 [49]

Answer:

B) $7.36

Explanation:

The preferred stocks' dividends = 8,000 x $20 x 10% = $16,000

To calculate earnings per share (EPS), we subtract the preferred stocks dividends from the net income = $200,000 - $16,000 = $184,000

Now we divide by the total number of common stocks = $184,000 / 25,000 shares = $7.36

*Convertible bonds are not included in this calculation, they should be included only after they are converted into stock.

8 0

3 years ago

Allen visits Reno, Nevada, once a year to gamble. This year his gambling Critical Thinking loss was $25,000. He commented to you

sveticcg [70]

Answer:

The answer is: If Allen is a professional gambler, he can use his gambling losses to offset the income from his gambling activities.

Explanation:

We can consider the airfare and hotel expenses as income part of Allen's income (+$3,000) but since he lost more money in the casino (-$25,000), the net effect is an economic loss (-$22,000).

That economic loss isn't tax deductible unless he was a professional gambler, then he could offset his income by $22,000.

5 0

4 years ago

A farmer grows wheat and sells it to a miller for $1; the miller turns the wheat into flour and sells it to a baker for $3; the

Serga [27]

Given:

Farmer's price = $1

Miller's price = $3

Baker's price = $6

To find:

The value added by the miller

Solution:

From the given, we can interpret that after purchasing from the farmer, the miller turns the wheat into flour by grinding and he sells the wheat flour to the baker.

This means that the miller added the cost of grinding with the purchasing cost. We can calculate the cost added by miller by subtracting the farmer's price from the miller's price that is $\$3-\$1=\$2$

Therefore, the value added by the miller is $2.

4 0

3 years ago

On December 31, 2017, Extreme Fitness has adjusted balances of $800,000 in Accounts Receivable and $55,000 in Allowance for Doub

Anastaziya [24]

Answer:

Accounts receivable is $745,000

Explanation:

The company would report as net receivable, the total amount on accounts receivable minus total amount on the Allowance for uncollectible Accounts, which implies that the balance represent the amount of credit that will not be possible to collect again hence, the value represent balance on net accounts receivable.

Accounts receivable = Adjusted balance in accounts receivable - Allowance for doubtful accounts

= $800,000 - $55,000

= $745,000

6 0

3 years ago

A U.S. Treasury bill with 69 days to maturity is quoted at a discount yield of 2.29 percent. Assume a $1 million face value. Wha

Molodets [167]

Answer:

2.32%

Explanation:

The formula for bond equivalent yield is in the attachment, we use it with the values provided in this question.

First, use the discount yield to calculate the price (P) of the bond

Face value = $1,000,000

Discount yield = 2.29 or 0.0229 as a decimal

Discount yield = [ (FV - P)/P ] *(360/T)

0.0229 =[ (1,000,000 -P)/P ] *360/69

0.0229P = (1,000,000 -P )5.2174

0.0229P + 5.2174P = 5,217,391.30

Price; P = $995,628.3618

Next, plug in the numbers in the bond equivalent yield (BEY) formula;

BEY = [ (1,000,000 - 995,628.3618)/$995,628.3618 ] * 365/69

BEY = 0.02323 OR 2.32%

8 0

4 years ago