When a lender checks the credit score of Jason for an auto loan, they would most likely notice that <u>b. He </u><u>paid off </u><u>a</u><u> car loan </u><u>after making</u><u> every payment</u><u> for 4 years. </u>
Lenders checking credit scores:
- Usually pay more attention to related loans
- Only bother with the credit score of the person in question not their relatives
The loan is for a car or an automobile of some sort so the lender will be looking for related loans in Jason's history. They will therefore most likely notice the car loan that was paid off.
In conclusion, a lender for an auto loan will most likely notice an auto loan history.
Options for this question include:
a. His savings account has more than $3000 in it
b. He paid off a car loan after making every payment for 4 years
c. When he stopped paying his credit card for 3 months 9 years ago
d. The credit scores of his family, including his parents and his wife if he is married
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Answer:
Explanation:
Pizza quantity Change = 60-50 = 10
Income change = $12000 - $10000 = $2000
Mid point of Quantity of Pizza = (50+60)/2 = 55
Mid point of income = ($12000 + $10000)/2 = $11000
Income elasticity = 10*11,000/2000*55 = 110,000/110,000=1
Pizza is a unit elastic normal good, because percentage change in income = % change in pizza quantity
Answer:
d.) 14.66%
Explanation:
The computation of the return required by shareholders is shown below:
Current share price = Next year dividend ÷ (Required rate of return - growth rate)
where,
Next year dividend would be
= $4.10 + $4.10 × 0.04
= $4.10 + 0.164
= $4.264
So, the return required by shareholders
$40 = $4.264 ÷ (Required rate of return - 4%)
After solving this equation,
The required rate of return is 14.66%
Answer:
The firm's sustainable growth rate is 13%.
Explanation:
The firm's sustainable growth rate can be calculated using the following formula:
Sustainable growth rate = Retention Rate * Return on Equity ............. (1)
Where;
Dividend payout ratio = 30%, or 0.30
Retention rate = 1 - dividend payout ratio = 1 - 0.30 = 0.70
Shareholder's equity = Total assets - Total debt = $913,600 - $424,500 = $489,100
Return on equity = Net income / Shareholder's equity = $94,000 / $489,100 = 0.19
Substituting the relevant values into equation (1), we have:
Sustainable growth rate = 0.70 * 0.19 = 0.13, or 13%
Therefore, the firm's sustainable growth rate is 13%.
