The type of unemployment associated with recessions is called:

Consider the following information on three stocks: State of Economy Probability of State of Economy Rate of Return if State Occ

PolarNik [594]

Answer:

market premium = 0,0781 = 7.81%

Explanation:

We have to calculate the market return and then calcualte the premium as the difference between the expected return on the market and the risk-free rate:

We multiply each outcome by the stock weight. and then for the probability of occurence of that state of economy

Calculations for boom:

Change of boom x (weighted outcome A + weighted outcome B + weighted outcome C)

0.25 x (0.45 x 0.15 + 0.45 0.27 + 0.1 x 0.05) = 0.05

$\left[\begin{array}{cccccc}Stock&&B&A&C&Totals\\Weights&&0,45&0,45&0,1&&Boom&0,25&0,15&0,27&0,11&0,05&Normal&0,65&0,11&0,14&0,09&0,078975&bust&0,1&-0,04&-0,19&0,05&-0,00985&&&&&return&0,119125&\end{array}\right]$

market expected return 0,1191

Market premium: 0,1191 - 0,041 = 0,0781

5 0

3 years ago

Megatrends stock will generate earnings of $2 per share this year. The discount rate for the stock is 10%, and the rate of retur

lawyer [7]

Answer:

a. Find both the growth rate of dividends and the price of the stock if the company reinvests the following fraction of its earnings in the firm:

(i) 0% ⇒ g = 0, P₀ = $2/10% = $20

(ii) 20% ⇒ g = 0.2 x 10% = 2%, P₀ = $1.632/8% = $20.40

(iii) 40% ⇒ g = 0.4 x 10% = 4%, P₀ = $1.248/6% = $20.80

b. Redo part (a) now assuming that the rate of return on reinvested earnings is 15%.

(i) 0% ⇒ g = 0, P₀ = $2/10% = $20

(ii) 20% ⇒ g = 0.2 x 15% = 3%, P₀ = $1.648/7% = $23.54

(iii) 40% ⇒ g = 0.4 x 15% = 6%, P₀ = $1.272/4% = $31.80

What is the present value of growth opportunities (PVGO) for each reinvestment rate

ROE = 10%, reinvestment rates:

(i) 0%: PVGO = $20 - $2/10% = $0

(ii) 20%: PVGO = $20.40 - $2/10% = $0.40

(iii) 40%: PVGO = $20.80 - $2/10% = $0.80

ROE = 15%, reinvestment rates:

(i) 0%: PVGO = $20 - $2/10% = $0

(ii) 20%: PVGO = $23.54 - $2/10% = $3.54

(iii) 40%: PVGO = $31.80 - $2/10% = $11.80

Explanation:

sustainable growth rate = g = retention rate x ROE

PVGO = stock price - earnings/Re

5 0

3 years ago

Method A assumes simple interest over final fractional periods, while Method B assumes simple discount over final fractional per

Marina86 [1]

Answer:

The answer is "1.1"

Explanation:

In the case of a single Interest, the principal value is determined as follows:

$\ I = Prt \\\ A = P + I\\A = P(1+rt) \\\\A = amount \\P= principle\\r = rate\\t= time$

In case of discount:

$D = Mrt \\P = M - D \\P = M(1-rt)\\\\Where, D= discount \\M =\ Maturity \ value \\$

Let income amount = 100, time = 1.5 years, and rate =20 %.

Formula:

A = P(1+rt)

A =P+I

by putting vale in the above formula we get the value that is = 76.92, thus method A will give 76.92 value.

If we calculate discount then the formula is:

P = M(1-rt)

M = 100 rate and time is same as above.

$P = 100(1-0.2 \times 1.5) \\P = 100 \times \frac{70}{100} \\P = 70$

Thus Method B will give the value that is 70

calculating ratio value:

$ratio = \frac{\ method\ A \ value} {\ method \ B \ value}\\\\\Rightarrow ratio = \frac{76.92}{70}\\\\\Rightarrow ratio = \frac{7692}{7000}\\\\\Rightarrow ratio = 1.098 \ \ \ \ or \ \ \ \ 1.$

4 0

3 years ago

Roland is filing his federal income tax return with the 1040ez form, and he received two w-2 forms. on one, $2620 in federal inc

seropon [69]

3890 is your answer if its apex

5 0

3 years ago

Read 2 more answers

Economic systems differ from one another based on who owns the factors of production and.

Aliun [14]

Economic systems differ from one another based on who owns the factors of production and. <u>Who make decisions regarding what to produce and how it is produced</u>

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<h3>What is Economic systems?</h3>

An economic system is a mechanism by which societies or governments manage and distribute public resources, services, and goods across a geographic region or nation. Economic systems control the factors of display, including land, capital, labor, and material resources.

<h3>What is represented by economic system?</h3>

An economic system is a means with the help of which the government plans and issues accessible services, resources, and things across the country. Economic systems manage aspects of production, combining wealth, labour, physical resources, and industry people.

To learn more about economic system, refer

brainly.com/question/26360576

#SPJ4

Complete Question is,

A. How much resources are available in the economy and where they are located

B. Who make decisions regarding what to produce and how it is produced

C. What kinds of products are produced in the economy and how plentiful they are

D. How big the population is, and the makeup of the population

5 0

1 year ago