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What law created the federal reserve system?

S_A_V [24]

Federal reserve act D

4 0

4 years ago

When group investors become aware of overseas investment opportunities and are willing to diversify their portfolios internation

sammy [17]

Answer:

they benefit from an expanded opportunity set.

Explanation:

As most of the business organizations focused on grabbing the investment opportunities which leads to diversify their business in terms of expanding the business in various locations, maximize the market share etc

This can be done with the help of opportunity set i.e. to expanded through which the firm could get the benefit of it

Hence, this would be the answer

3 0

3 years ago

Bedekar, Inc., has an issue of preferred stock outstanding that pays a $3.40 dividend every year in perpetuity. If this issue cu

Ainat [17]

Answer:

i=4.84%

Explanation:

the key to answer this question, is to remember the model of return for a perpeuity dividend calculation:

$Value=\frac{1}{i-k}$

where value is the current stock price, i is the dividend yield and k is the growth rate, so applying to this particular case we have

k=3.4/91

k=3.74%

and solving i for the previous formula:

$91=\frac{1}{i-0.0374}$

$0.01098={i-0.0374}$

$i=4.84\%$

8 0

3 years ago

The following items are reported on a company's balance sheet: Cash $225,000 Marketable securities 115,000 Accounts receivable (

aleksandrvk [35]

Answer:

Current ratio is 2.5:1

Quick ratio 1.9:1

Explanation:

Current ratio =current assets/current laibilities:1

current assets =cash+marketable securities+accounts receivables+inventory

current assets=$225000+$115,000+$112000+$158,000

current assets =$610,000

current liabilities=accounts payable=$244,000

Current ratio=610000/244000

current ratio=2.5 :1

quick ratio =(current assets-inventory)/current liabilities:1

quick ratio=(610000-158000)/244000

=1.9:1

The current ratio suggests the company has liquid resources that is more than double of current liabilities which can used in discharging debt obligations in the normal course of business

Quick ratio excludes inventory from the ratio since inventory is most difficult item to convert to cash

7 0

3 years ago

Read 2 more answers

Universal Laser, Inc., just paid a dividend of $3.10 on its stock. The growth rate in dividends is expected to be a constant 6 p

Vadim26 [7]

Answer:

Ans. The current price of the stock is $56.82

Explanation:

Hi, well, the problem here is that we have different discount rates, in other words the required rate of return for the stock changes several times, therefore we are going to break this problem in 3 parts, or bring to present value all the cash flows in 3 steps. Let´s start with the value of the dividends.

We have to use the following formula.

$Dn=D_{(n-1)} *(1+g)$

Where, D(n-1) is last dividend and Dn is the dividend that we are looking for, for example, D1 = 3.10*(1+0.06)=3.29, D2=3.29*(1+0.06)=3.48, and so forth. The amount to pay on dividends per share is,

D1=3.29; D2=3.48; D3=3.69; D4=3.91; D5=4.15; D6=4.40; D(7)=4.66

Since the first 3 years are to be discounted at a 15%, this is how the formula should look like.

$PV(1)=\frac{D1}{(1+r(1))^{1} } +\frac{D2}{(1+r(1))^{2} } +\frac{D3}{(1+r(1))^{3} }$

$PV(1)=\frac{3.29}{(1+0.15)^{1} } +\frac{3.48}{(1+0.15)^{2} } +\frac{3.69}{(1+0.15)^{3} }=7.92$

Now, for the second part, we have to bring all cash flows to year 3 at r(2)=13% and then bring it to present value at r(1)=15%. This is because we have 2 different discount rates, this is as follows.

$PV(2)=(\frac{D4}{(1+r(2))^{1} } +\frac{D5}{(1+r(2))^{2} } +\frac{D6}{(1+r(2))^{3} })*\frac{1}{((1+r(1)^{3} }$

$PV(2)=(\frac{3.91}{(1+0.13)^{1} } +\frac{4.15}{(1+0.13)^{2} } +\frac{4.40}{(1+0.13)^{3} })*\frac{1}{(1+0.15)^{3} } =6.42$

Finally, we need to bring all the future cash flows from year 7 and beyond, notice that we need to use the return rate r(3) to bring everything to year 6, then we have to bring it to year 3 and then to present value, everything as follows.

$PV(3)=(\frac{D7}{(r(3)-g)} )*(\frac{1}{(1+r(2))^{3} } )*(\frac{1}{(1+r(1))^{3} } )$

$PV(3)=(\frac{4.66}{(0.11-0.06)} )*(\frac{1}{(1+0.13)^{3} } )*(\frac{1}{(1+0.15)^{3} } )=42.48$

So, the price of the stock is PV(1) + PV(2) + PV(3), or:

$Price=7.92+6.42+42.48=56.82$

Price= $56.82/share

Best of luck.

3 0

3 years ago