Answer: Option A
Explanation: In simple words, return on investment refers to the profit that an investor makes on the total amount of resources he or she employs in an investment. An investor setting a standard regarding earning a profit in relation to his or her investment in a project is called a return on investment objective.
Generally such objectives are set for earning at least a minimum amount, however above that will be accepted positively and higher return that the set criteria is possible as well.
Hence from the above we can conclude that the correct option is A.
Answer:
8.37%
Explanation:
WACC = [E / (D + E)](Re) + [D / (D + E)](Rd)(1 - T)
E = market value of equity
D = market value of debt
Re = cost of equity
Rd = cost of debt
T = taxes
- E = 3,000,000 common stocks x $50 = $150,000,000
- DP = 1,000,000 preferred stock x $33 = $33,000,000
- DB = 80,000 bonds x $1,080 = $86,400,000
- Re = (dividend / stock price) + growth rate = ($2.4 / $50) + 6% = 0.048 + 6% = 0.108 or 10.8%
- Rdp = $2.70 / $33 = 8.18%
- Rdb = $85 / $1,080 = 7.87%
- T = 33%
WACC = [E / (D + E)](Re) + [DP / (D + E)](Rdp)(1 - T) + [DB / (D + E)](Rdb)(1 - T)
since the numbers are too large, I will divide the calculation into three parts:
- [E / (D + E)](Re) = [$150,000,000 / ($119,400,000 + $150,000,000)](10.8%) = ($150,000,000 / $269,400,000) x 10.8% = 0.5568 x 10.8% = 0.0601 or 6.01%
- [DP / (D + E)](Rdp)(1 - T) = ($33,000,000 / $269,400,000) x 8.18% x (1 - 33%) = 0.1225 x 8.18% x 67% = 0.0067 or 0.67%
- [DB / (D + E)](Rdb)(1 - T) = ($86,400,000 / $269,400,000) x 7.87% x 67% = 0.0169 or 1.69%
WACC = 6.01% + 0.67% + 1.69% = 8.37%
Answer:
$13,241
Explanation:
From the data we were given in the question:
future value = fv = $1,500,000
time = t = 30 year
rate = r = 8%
We are required to find out How much does he need to invest to achieve his goal
solution
future value = principal ( 1+ rate)^(t-1) / rate
1500000 = principal (1 + .08)^(30-1)/ 0.08
we make principal, p, subject of the formula.
principal = 1500000 / ( (1 + .08)^(30-1)/ 0.08 )
Principal = 1,500,000 / 113.2832
principal = 13241.15
so Dan needs to invest $13241
Answer:
Investors
Explanation:
Investor is the term which is defined as the person or an individual who allocated the capital or the fund with the expectation for gaining an advantage or the financial return in future.
The investor is someone who provides the business with the capital or funds and someone who bought the stock. Under this situation, the banks are those who channels the money from the savers to borrowers to the investors.