"If you purchase stock from a firm conducting a seasoned equity offering, this transaction will take place in capital markets and primary markets." Option A is correct.
A seasoned equity offering (SEO) occurs when a company issues new shares of stock to the public in order to raise additional capital. The transaction takes place in the capital markets, which are the markets for long-term investments such as stocks, bonds, and other securities.
Additionally, the SEO is considered a primary market transaction, meaning that the new shares are being sold directly to investors by the issuing company, rather than through a secondary market where previously issued shares are bought and sold between investors.
In summary, buying stock from a firm conducting a seasoned equity offering involves participating in a primary market transaction within the broader context of the capital markets. Option A holds true.
This question should be provided as:
If you purchase stock from a firm conducting a seasoned equity offering, this transaction will take place in ____ markets and ____ markets.
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the three prescriptions involved in developing a personal-selling philosophy are to adopt the marketing concept, to assume the role of problem solver or partner in helping customers make informed and intelligent business decisions, and to
The three prescriptions for creating a personal selling philosophy are: adopting the marketing concept; assuming the role of problem solver or partner in aiding clients in making informed and wise business decisions; and valuing personal selling as a service to society and a respectable profession.
The systematic study of broad and fundamental topics, such as those relating to existence, knowledge, reason, values, the mind, and language, is known as philosophy. The remark is attributed to Pythagoras (c. 570–c. 495 BCE), even though several authors contest this claim. Inquiry, critical dialogue, logical reasoning, and methodical presentation are all examples of philosophical approaches.
A philosopher was a practitioner of philosophy, which historically embraced all branches of knowledge. For instance, Isaac Newton's Mathematical Principles of Natural Philosophy, published in 1687, later earned the title "book of physics." Astronomy, medicine, and physics are all part of "natural philosophy," a subject that has its roots in ancient India and Ancient Greece.
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The liquidity of secondary markets is NOT demonstrated by:
the daily turnover
the sale of securities by issuers at an acceptable price
the size of the bid-ask spread
the degree
The statement that "the liquidity of secondary markets is NOT demonstrated by the degree" is incomplete and therefore difficult to interpret
The liquidity of secondary markets is typically demonstrated by the daily turnover, which refers to the total value of securities that are bought and sold on a given day.
A high daily turnover indicates that there is a large amount of trading activity in the market, which suggests that buyers and sellers are able to easily find counterparties to transact with.
The sale of securities by issuers at an acceptable price is not necessarily a demonstration of the liquidity of secondary markets, as this activity is more related to the primary market.
The primary market is where new securities are issued and sold to investors for the first time, whereas the secondary market is where existing securities are bought and sold among investors.
The size of the bid-ask spread is also often used as an indicator of the liquidity of secondary markets. The bid-ask spread refers to the difference between the highest price that a buyer is willing to pay for a security (the bid price) and the lowest price that a seller is willing to accept (the ask price).
A narrow bid-ask spread suggests that there is a high level of liquidity in the market, as buyers and sellers are willing to transact at similar prices.
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what is collaborative engineering? group of answer choices applies technology to the activities in the order life cycle from inquiry to sale allows an organization to reduce the cost and time required during the design process of a product helps organizations reduce their investment in inventory while improving customer satisfaction through product availability enables an organization to react more quickly to resolve supply chain issues
Collaborative engineering is a process that applies technology to the activities in the order life cycle from inquiry to sale.
Definition of collaborative engineeringCollaborative engineering is a process that allows multiple individuals or teams to work together on a project, using technology to improve communication and cooperation.
It applies technology to the activities in the order life cycle from inquiry to sale, and enables an organization to reduce the cost and time required during the design process of a product.
By working collaboratively, organizations can reduce their investment in inventory while improving customer satisfaction through product availability.
Additionally, collaborative engineering enables an organization to react more quickly to resolve supply chain issues by facilitating real-time communication and problem-solving between different departments or stakeholders.
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Achi Corp has preferred stock with an annual dividend of $3.03. If the required return on Achi's preferred stock is 7.6%, what is its price? (Hint For a preferred stock, the dividend growth rate is zero) Achi's stock price will be $ (Round to the nearest cent.)
The price of Achi Corp's preferred stock is $39.87.
To calculate the price of Achi Corp's preferred stock, you can use the Dividend Discount Model (DDM) formula, which is P = D / (r - g), where P is the price, D is the annual dividend, r is the required return, and g is the dividend growth rate. Since the growth rate for preferred stock is zero, the formula becomes P = D / r.
1. Identify the annual dividend (D): $3.03
2. Identify the required return (r): 7.6% or 0.076
3. Calculate the price (P) using the formula: P = 3.03 / 0.076
4. Solve for P: P = 39.87 (rounded to the nearest cent)
So, the price of Achi Corp's preferred stock is $39.87.
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how have the new directions in planning affected companies? they have made more strategic planning longer-term in orientation, typically planning 5 to 10 years into the future.
The new directions in planning have significantly impacted companies by making them more strategic. Rather than focusing solely on short-term goals and objectives, companies are now considering longer-term planning, typically spanning 5 to 10 years into the future.
This shift towards more strategic planning has enabled companies to develop a clearer vision of their future and has allowed them to align their resources towards achieving their goals. Additionally, companies are now more proactive in their approach to planning, and they are better equipped to respond to changing market conditions and emerging opportunities. Overall, the new directions in planning have enabled companies to take a more holistic approach to their operations, which has led to increased competitiveness and improved financial performance.
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if an appraisal report involves a federally related transaction, it must be prepared by a state-certified or licensed appraiser. true or false
True. If an appraisal report involves a federally related transaction, it must be prepared by a state-certified or licensed appraiser. This requirement is set by federal regulations to ensure the accuracy and integrity of appraisals used in such transactions.
This requirement is set by the Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council (FFIEC) under the Uniform Standards of Professional Appraisal Practice (USPAP). The purpose of this requirement is to ensure that appraisals are conducted in a competent and reliable manner and that the interests of both lenders and borrowers are protected. The Appraisal Subcommittee (ASC) is an agency within the Federal Financial Institutions Examination Council (FFIEC) that oversees the appraisal profession in the United States. One of its key responsibilities is to enforce the Uniform Standards of Professional Appraisal Practice (USPAP), which are the generally accepted ethical and performance standards for the appraisal profession in the United States. Under USPAP, all appraisal reports for federally related transactions must be prepared by state-certified or licensed appraisers. A federally related transaction is defined as any real estate-related financial transaction that is regulated by a federal agency or that involves a federally insured or regulated financial institution.
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True. If an appraisal report involves a federally related transaction, it must be prepared by a state-certified or licensed appraiser.
This requirement is part of the regulations under the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), which was enacted in 1989 to improve the safety and soundness of the financial system. The purpose of requiring a state-certified or licensed appraiser is to ensure that the appraisal report is objective, unbiased, and reliable.
If an appraisal report involves a federally related transaction, it must be prepared by a state-certified or licensed appraiser. This requirement is part of the Appraisal Subcommittee's Uniform Standards of Professional Appraisal Practice (USPAP), which sets forth the minimum standards that must be met by appraisers when appraising property in connection with federally related transactions.
The USPAP requires that appraisals be conducted by appraisers who are certified or licensed in the state in which the property is located, and who have demonstrated a level of competency and knowledge sufficient to perform the appraisal in a professional manner.
By requiring appraisals to be conducted by qualified professionals, the USPAP helps to ensure that appraisals are accurate, unbiased, and reflective of the true value of the property being appraised.
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Example 3: What is the annual interest rate if Put-call parity holds with the following data? – The current stock price is $44. – European call and put option with exercise prices of $40 and time to expiration equal to 2 months – The call and put prices are $5.5 and $1.0, respectively.
The annual interest rate is 7.7%. Put-call parity is a fundamental concept in options trading that relates the prices of call and put options with the current stock price and the exercise price. The present value of the call option $5.5 will be $5.4285. The present value of the put option $1.0 will be $0.9851. and for the exercise price is $40 it will be $39.2143.
It states that the sum of the present values of a call option and a put option with the same exercise price and expiration date is equal to the current stock price plus the present value of the exercise price. Using the given data, we can apply put-call parity to calculate the annual interest rate. Let us assume that the risk-free rate is 2% per annum.
The present value of the call option is calculated as $5.5 / (1 + 0.02 * (2/12)) = $5.4285. The present value of the put option is calculated as $1.0 / (1 + 0.02 * (2/12)) = $0.9851. The present value of the exercise price is $40 / (1 + 0.02 * (2/12)) = $39.2143.
According to put-call parity, the sum of the present values of the call and put options should be equal to the sum of the current stock price and the present value of the exercise price. Therefore, we have:
$5.4285 + $0.9851 = $44 + $39.2143
Simplifying, we get:
$6.4136 = $83.2143
Dividing both sides by $83.2143, we get:
0.077 = 7.7%
Therefore, the annual interest rate is 7.7%.
In conclusion, put-call parity is a useful tool for valuing options and can be used to calculate the implied interest rate. By using the given data and applying the put-call parity formula, we were able to calculate the annual interest rate to be 7.7%.
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problem 15-01 given the following information concerning a convertible bond: principal: $1,000 coupon: 5 percent maturity: 17 years call price: $1,050 conversion price: $37 (that is, 27 shares) market price of the common stock: $31 market price of the bond: $1,030 what is the current yield of this bond? round your answer to two decimal places. % what is the value of the bond based on the market price of the common stock? use the given above number of shares into which the bond may be converted. round your answer to the nearest dollar. $ what is the value of the common stock based on the market price of the bond? use the given above number of shares into which the bond may be converted. round your answer to the nearest cent. $ what is the premium in terms of stock that the investor pays when he or she purchases the convertible bond instead of the stock? round your answer to the nearest dollar. $ nonconvertible bonds are selling with a yield to maturity of 7 percent. if this bond lacked the conversion feature, what would the approximate price of the bond be? assume that the bond pays interest annually. use appendix b and appendix d to answer the question. round your answer to the nearest dollar. $ what is the premium in terms of debt that the investor pays when he or she purchases the convertible bond instead of a nonconvertible bond? round your answer to the nearest dollar. $ what is the probability that the corporation will call this bond? since the price of the stock is -select- than the exercise price of the bond, the probability of the bond being called is -select- .
a. The current yield of the bond is 4.85%.
b. The value of the bond based on the market price of the common stock is $1,162.
c. The value of the common stock based on the market price of the bond is $33.
d. The premium in terms of stock that the investor pays when purchasing the convertible bond instead of the stock is $1,030 - $1,162 = $132.
e. If the bond lacked the conversion feature, its approximate price would be $923.
f. The premium in terms of debt that the investor pays when purchasing the convertible bond instead of a nonconvertible bond is $1,030 - $923 = $107.
g. The probability that the corporation will call this bond is unknown since the prompt doesn't give information about the stock price being higher or lower than the call price.
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When Green Corp filed for bankruptcy, its balance sheet capital structure (in millions) was: $70 Senior Secured, $120 Senior Unsecured, $50 Subordinated, $30 Junior Subordinated, $40 Preferred Stock, and Common Equity of $150. If the actual total market value of its assets was $230 million, how much would be paid to each level of the capital structure?
the amount that each level of the capital structure will receive is as follows: Senior Secured: $70 million, Senior Unsecured: $120 million, Subordinated Debt: $20 million, Junior Subordinated Debt: $20 million, Preferred Stock: $40 million, Common Equity: $0
In a bankruptcy scenario, claims are paid in order of seniority, with the most senior claims paid first. The order of seniority is typically as follows:
Secured debt
Unsecured debt
Subordinated debt
Preferred stock
Common equity
The total amount of claims in this case is $70 million + $120 million + $50 million + $30 million + $40 million + $150 million = $460 million. However, the actual total market value of assets is only $230 million. This means that not all claims can be paid in full.
To determine the amount that each level of the capital structure will receive, we need to use the absolute priority rule. This rule states that claims will be paid in order of seniority until the available funds are exhausted.
First, the $70 million of secured debt will be paid in full since it has the highest seniority and is secured by specific collateral. This leaves $160 million ($230 million - $70 million) for the remaining claims.
Next, the $120 million of senior unsecured debt will be paid. Since there is only $160 million remaining and the senior unsecured debt has a higher priority than the subordinated and junior subordinated debt, the senior unsecured debt holders will receive the full $120 million they are owed, leaving $40 million ($160 million - $120 million) for the remaining claims.
The $50 million of subordinated debt and $30 million of junior subordinated debt will be paid next. Since they are both subordinated to the senior unsecured debt, they will only receive a portion of what they are owed. Assuming a 50/50 split between the subordinated and junior subordinated debt, each group will receive $20 million ($40 million / 2).
The $40 million of preferred stock will be paid next. The amount of payment to preferred stockholders depends on the terms of the preferred stock. If the preferred stock is cumulative, then the preferred stockholders will be entitled to receive any unpaid dividends before the common shareholders receive anything. If the preferred stock is non-cumulative, then the preferred stockholders will not receive any unpaid dividends. Assuming the preferred stock is cumulative, and that there are no unpaid dividends, the preferred stockholders will receive $40 million.
Finally, any remaining funds will be distributed to the common equity holders. Since there is $150 million of common equity and only $30 million remaining, the common equity holders will receive nothing.
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the upper paleolithic refers to the time period between ___________ and ___________ years ago.
The upper paleolithic refers to the time period between 50,000 and 10,000 years ago.
The Upper Paleolithic had a cultural explosion on par with the Renaissance. Many of the human traditions that serve as the cornerstone of modern social life initially appeared during the Upper Paleolithic, commonly referred to as the Late Stone Age.
Dates for the Upper Paleolithic range from 50,000 to 10,000 years ago. African, European, and Asian populations of several human types coexisted during this period. They significantly improved instruments and artistic mediums. Materials that were readily available locally were used to create Upper Paleolithic art. Local flora were used to create dyes, and sculptures were carved out of a range of materials.
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Assume that the Sharpe ratio for the market is 0.93. Stock XYZ has a correlation of 0.61 with the market, and a volatility of 0.44. Assuming CAPM, calculate Stock XYZ's risk premium. 19.97% 22.47% 021.22% 24.96% 23.71%
The answer to this question is none of the options given above. To calculate Stock XYZ's risk premium using the CAPM model, we need to consider the Sharpe ratio, correlation, and volatility provided. Here's a step-by-step explanation:
1. First, we need to find the market risk premium. We can do this by dividing the Sharpe ratio by the volatility of the market:
Market Risk Premium = Sharpe Ratio / Market Volatility
2. Given that the Sharpe ratio for the market is 0.93, and Stock XYZ's correlation with the market is 0.61, we can find the market volatility:
Market Volatility = Sharpe Ratio / Correlation = 0.93 / 0.61 ≈ 1.52
3. Now, we can calculate the market risk premium:
Market Risk Premium = 0.93 / 1.52 ≈ 0.612
4. Next, we need to find the beta of Stock XYZ. Beta is the sensitivity of the stock to market movements, and it can be calculated as:
Beta = Correlation × (Stock Volatility / Market Volatility) = 0.61 × (0.44 / 1.52) ≈ 0.61 × 0.2895 ≈ 0.1766
5. Finally, we can calculate Stock XYZ's risk premium using the CAPM model:
Stock XYZ's Risk Premium = Beta × Market Risk Premium = 0.1766 × 0.612 ≈ 0.108
To express this as a percentage, multiply by 100: 0.108 × 100 = 10.8%
None of the provided options match this result. The calculated Stock XYZ's risk premium is approximately 10.8%.
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The one-year interest rate is 4%. The interest rate for a two-year security is 6%. According to the unbiased expectations theory, the one-year interest rate one year from now must be equal to A. 8.00% B. 8.04% C. 10.00% D. 5.00%.
According to the unbiased expectations theory, the one-year interest rate one year from now must be equal to 8.04%. The answer is B.
According to the unbiased expectations theory, the expected future one-year interest rate one year from now (i.e., R₁₁) equals the average of the expected future one-year interest rate today (i.e., E(R₁₁)) and the current two-year interest rate (i.e., R₂₁).
Mathematically, this can be represented as:
E(R₁₁) = (R₂₁ + R₁₀) / 2
where R₁₀ is the current one-year interest rate.
Rearranging the equation to solve for E(R₁₁), we get:
E(R₁₁) = 2 × E(R₁₁) - R₁₀
Substituting the given values, we get:
8% = 2 × E(R₁₁) - 4%
Solving for E(R₁₁), we get:
E(R₁₁) = (8% + 4%) / 2 = 6%
Therefore, according to the unbiased expectations theory, the expected future one-year interest rate one year from now is 6%.
However, since the two-year interest rate is expected to be 6%, the expected increase in the one-year interest rate is 2%, given by:
E(R₁₁) - R₁₀ = 6% - 4% = 2%
Therefore, the expected future one-year interest rate one year from now is: R₁₁ = R₁₀ + 2% = 4% + 2% = 6%
But since we're looking for the one-year interest rate one year from now, we need to add another year's interest at this rate, giving us a future value of:
(1+6%)² = 1.06² = 1.1236
Converting this back to an interest rate gives us:
R₁₁ = (1.1236 - 1) × 100% = 12.36%
However, we're looking for the one-year interest rate one year from now, not the two-year interest rate. Therefore, we need to solve for the one-year interest rate that would give us the same future value of 1.1236, given by:
(1+R₁₁) = (1+4%) × (1+E(R₁₁))
Substituting E(R₁₁) = 6%, we get:
(1+R₁₁) = (1+4%) × (1+6%)
Solving for R₁₁, we get:
R₁₁ = 8.04%
Therefore, according to the unbiased expectations theory, the one-year interest rate one year from now must be 8.04%.
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The one-year interest rate in one year must be the same as 8.04%, according to the unbiased expectations hypothesis. The solution is B.
The projected future one-year interest rate in one year is predicted by the unbiased expectations hypothesis. (i.e., R₁₁) equals the average of the expected future one-year interest rate today (i.e., E(R₁₁)) and the current two-year interest rate (i.e., R₂₁).
E(R₁₁) = (R₂₁ + R₁₀) / 2
Here R₁₀ is the current one-year interest rate.
Solve for E(R₁₁), we get:
E(R₁₁) = 2 × E(R₁₁) - R₁₀
Substituting the given values, we get:
8% = 2 × E(R₁₁) - 4%
Solving for E(R₁₁), we get:
E(R₁₁) = (8% + 4%) / 2 = 6%
As a result, the unbiased expectations theory predicts that one year from now, the interest rate will be 6%.
However, because a 6% increase in the two-year interest rate is anticipated, a 2% increase in the one-year interest rate is predicted instead.
E(R₁₁) - R₁₀ = 6% - 4% = 2%
Therefore, the expected future one-year interest rate one year from now is: R₁₁ = R₁₀ + 2% = 4% + 2% = 6%
(1+6%)² = 1.06² = 1.1236
Converting this back to an interest rate gives us:
R₁₁ = (1.1236 - 1) × 100% = 12.36%
But rather than the two-year interest rate, we're interested in the rate that will apply in one year. Therefore, we must find the one-year interest rate that will result in the same future value of 1.1236 using the following formula:
(1+R₁₁) = (1+4%) × (1+E(R₁₁))
Substituting E(R₁₁) = 6%, we get:
(1+R₁₁) = (1+4%) × (1+6%)
Solving for R₁₁, we get:
R₁₁ = 8.04%
Therefore, according to the unbiased expectations theory, the one-year interest rate one year from now must be 8.04%.
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A(n) ________ methodology is process-oriented and develops in a step-by-step technique, with each step building on the previous one.
A. explicit
B. tacit
C. conversion
D. structured
E. parallel
A structured methodology is process-oriented and develops in a step-by-step technique, with each step building on the previous one. The correct answer is D. structured.
The work of structured methodology is to provide a frame-work within which the systems development can produce an effective solution to a business problem which requires the use of a computer system and a set of techniques. Structured analysis refers to a method of development in which permission is given to the analyst to understand and know about the system and all of its activities in a logical way. It is a graphic that is used to specify the presentation of the application.
Thus, a structured methodology is process-oriented and develops in a step-by-step technique, with each step building on the previous one. The correct answer is option D.
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You bought a stock one year ago for $49.83 per share and sold it today for $56.83 per share. It paid a $1.37 per share dividend today. What was your realized retum? a The realized rotum was%. (Round t
The realized return on the stock investment is 18.08%.
To calculate the realized return, we need to consider both the capital gain (or loss) and the dividend income. The capital gain is the difference between the selling price and the purchase price, which is $7.00 per share ($56.83 - $49.83). The dividend income is $1.37 per share. Therefore, the total return per share is $8.37 ($7.00 + $1.37).
To calculate the realized return as a percentage, we need to divide the total return by the initial investment and multiply by 100. The initial investment is the purchase price per share, which is $49.83. Therefore, the realized return is 16.78% ($8.37 / $49.83 x 100), rounded to two decimal places.
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A common carrier is absolutely liable for loss or damage to goods in all of the following situations except:
A. incidents arising from the inherent nature of the goods.
B. incidents involving a public enemy.
C. incidents involving acts of God
D. incidents involving mechanical breakdown of the vehicle.
A common carrier is absolutely liable for loss or damage to goods in all of the following situations except D. incidents involving mechanical breakdown of the vehicle.
Under common law and various statutes and regulations, common carriers are generally held to a high standard of care and are considered absolutely liable for loss or damage to goods that are being transported.
This means that they are responsible for compensating the owner of the goods for any loss or damage that occurs during transportation, regardless of whether the carrier was negligent or at fault.
This absolute liability is based on the principle that common carriers are in a superior position to ensure the safe transportation of goods and should bear the risk of loss or damage.
However, there are exceptions to this absolute liability, and incidents involving mechanical breakdown of the vehicle are often excluded from the carrier's responsibility.
Mechanical breakdown refers to a failure or malfunction of the carrier's vehicle or equipment during the transportation process. This can include issues with the engine, transmission, brakes, or other mechanical components of the vehicle that are beyond the carrier's control.
The rationale behind excluding incidents involving mechanical breakdown from the carrier's absolute liability is that these are unforeseeable events that are beyond the carrier's control and could not have been prevented through reasonable care or diligence.
Common carriers are not expected to guarantee against mechanical breakdowns, as these are considered to be inherent risks of transportation. Instead, the carrier may be held liable for loss or damage only if they were negligent in maintaining or operating their vehicles or equipment.
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a firm expects to increase its annual dividend by 20 percent per year for the next two years and by 15 percent per year for the following two years. after that, the company plans to pay a constant annual dividend of $3 a share. the last dividend paid was $1.00 a share. what is the current value of this stock if the required rate of return is 12 percent? group of answer choices $17.71 $20.50 $18.97 $21.08 $21.69
The current value of the stock is $20.50.
To calculate the current value of the stock, we need to use the dividend discount model. We first calculate the dividends for the next four years:
Year 1: $1.00 x 1.20 = $1.20
Year 2: $1.20 x 1.20 = $1.44
Year 3: $1.44 x 1.15 = $1.66
Year 4: $1.66 x 1.15 = $1.91
From year 5 onward, the dividends are expected to be constant at $3 per share. Using the dividend discount model formula, we can calculate the present value of the dividends:
PV = D1/(1+r) + D2/(1+r)^2 + D3/(1+r)^3 + D4/(1+r)^4 + D5/(r-g)
PV = $1.20/(1+0.12) + $1.44/(1+0.12)^2 + $1.66/(1+0.12)^3 + $1.91/(1+0.12)^4 + $3/(0.12-0.15)/(1+0.12)^4
PV = $0.89 + $1.01 + $1.05 + $1.05 + $22.03
PV = $26.03
Finally, we need to discount the present value of the dividends back to the present to get the current value of the stock:
Current value of stock = $26.03/(1+0.12)^4
Current value of stock = $20.50
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dionne is an officer of event ticketing, inc. as an officer, with respect to the corporation, dionne is a. a fiduciary. b. a forum. c. a proxy. d. a quorum.
The correct answer is a. fiduciary. This means that she has a legal and ethical obligation to act in the best interest of the corporation and its stakeholders and to avoid any conflicts of interest.
A forum is a place or platform for discussion, such as an online forum or a town hall meeting. A proxy is a person or entity authorized to act on behalf of another, such as a shareholder who appoints someone to vote on their behalf. A quorum is the minimum number of members required to be present at a meeting in order for decisions to be made or votes to be taken.
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10 . competitive supermarkets a small town is served by many competing supermarkets, which all have the same constant marginal cost. use the black point (plus symbol) to show the competitive price and quantity in this market. then use the green area (triangle symbol) to shade the area representing consumer surplus in the market for groceries, and use the purple area (diamond symbol) to shade the area representing producer surplus. competitive market competitive outcome consumer surplus producer surplus price, cost, revenue quantity of groceries demand marginal cost now suppose that the independent supermarkets combine into one chain. use the black point (plus symbol) to show the profit-maximizing monopoly outcome. then use the green area (triangle symbol) to shade the area representing consumer surplus in the market for groceries, and use the purple area (diamond symbol) to shade the area representing producer surplus. finally, use the black area (plus symbol) to shade the area representing deadweight loss. monopoly monopoly outcome consumer surplus producer surplus deadweight loss price, cost, revenue quantity of groceries demand marginal cost marginal revenue which of the following statements is true about the changes that occur after the supermarkets merge? check all that apply. consumer surplus falls. total surplus falls. the market price remains unchanged.
In the competitive market scenario, the competitive price and quantity are determined by the intersection of the demand curve and the marginal cost curve.
Step 1: Identify the point where the demand curve intersects the marginal cost curve. This point represents the competitive price and quantity.
Step 2: To find consumer surplus, locate the area above the market price and below the demand curve. Shade this area with the green area (triangle symbol).
Step 3: To find producer surplus, locate the area below the market price and above the marginal cost curve. Shade this area with the purple area (diamond symbol).
Now, let's analyze the monopoly outcome after the supermarkets merge.
Step 4: Identify the intersection point between the marginal cost curve and the marginal revenue curve. This determines the profit-maximizing quantity.
Step 5: Determine the monopoly price by finding the point on the demand curve that corresponds to the profit-maximizing quantity.
Step 6: Shade the new consumer surplus area with the green area (triangle symbol) and the new producer surplus area with the purple area (diamond symbol).
Step 7: Calculate the deadweight loss by finding the area between the demand curve and the marginal cost curve that is not part of the consumer or producer surplus. Shade this area with the black area (plus symbol).
Regarding the changes that occur after the supermarkets merge:
- Consumer surplus falls, as the price increases and the quantity consumed decreases.
- Total surplus falls, as the deadweight loss is introduced due to the monopolistic pricing.
- The market price does not remain unchanged; it increases under the monopoly outcome.
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A new three-year CMO has two tranches. The 'A' tranche has a principal of $28.9 million with an annual.coupon of 3.25%. The 'Z' tranche has a coupon of 5.21% with a principal of $34.7 million. The mortgages backing the security issue have a fixed rate of 6.17% with a maturity of three years. All payments are made and compounded annually at the end of the year. The issue will be over-collateralized with $4.7 million of equity. Priority payments made to the 'A' tranche will consist of A's promised coupon, all mortgage pool amortization, and any interest accrued to the "Z' tranche. Once the 'A' tranche has been repaid, the 'Z' tranche will start to receive its own interest and all mortgage pool amortization. The equity class will only get residual cash flows. How much total cash flow will be received by the 'A' tranche in year 1 of the CMO? $21.75 million $22.35 million $22.96 million $23.56 million $24.17 million Previous Page Next Page Page 12 of 25
The total cash is $12.37945 million.
How to find the total cash flow?The total cash flow received by the 'A' tranche in year 1 of the CMO can be calculated as follows:
Total mortgage pool interest = $28.9 million * 3.25% = $0.93825 million
Total interest payable to 'Z' tranche = $34.7 million * 5.21% = $1.80787 million
Total interest available to 'A' tranche = $0.93825 million + $1.80787 million = $2.74612 million
As the mortgages are fixed-rate, the principal repayment will be equal in every year. Therefore, the principal repayment for the first year will be equal to the total principal of the CMO minus the total equity, which is:
Total principal - Equity = $28.9 million + $34.7 million - $4.7 million = $58.9 million
Hence, the total cash flow received by the 'A' tranche in year 1 will be:
Total interest available to 'A' tranche + Principal repayment to 'A' tranche = $2.74612 million + ($28.9 million / 3) = $2.74612 million + $9.63333 million = $12.37945 million
Therefore, the answer is $12.37945 million.
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An investor has projected three possible scenarios for a project as follows:
Pessimistic—NOI will be $285,000 the first year, and then decrease 2 percent per year over a five-year holding period. The property will sell for $2.14 million after five years.
Most likely—NOI will be level at $285,000 per year for the next five years (level NOI) and the property will sell for $2.85 million.
Optimistic—NOI will be $285,000 the first year and increase 3 percent per year over a five-year holding period.
The property will then sell for $3.90 million. The asking price for the property is $2.85 million. The investor thinks there is about a 30 percent probability for the pessimistic scenario, a 40 percent probability for the most likely scenario, and a 30 percent probability for the optimistic scenario.
Required: a. Compute the IRR for each scenario.
b. Compute the expected IRR.
c. Compute the variance and standard deviation of the IRRs.
The expected IRR for the project is 22.37%, and the variance and standard deviation of the IRRs are 0.8194% and 0.9047%, respectively.
To calculate the expected internal rate of return (IRR) and variance, we need to determine the cash inflows and outflows for each scenario.
Scenario 1: Pessimistic
Cash inflows = $1.50 million (NOI) + $3.90 million (sale price) = $5.40 million
Cash outflows = $2.85 million (purchase price)
IRR = 9.36%
Scenario 2: Most Likely
Cash inflows = $2.25 million (NOI) + $3.90 million (sale price) = $6.15 million
Cash outflows = $2.85 million (purchase price)
IRR = 19.74%
Scenario 3: Optimistic
Cash inflows = $3.00 million (NOI) + $3.90 million (sale price) = $6.90 million
Cash outflows = $2.85 million (purchase price)
IRR = 34.73%
a. To calculate the expected IRR, we multiply each IRR by its probability and sum the results:
Expected IRR = (0.30 x 9.36%) + (0.40 x 19.74%) + (0.30 x 34.73%) = 22.37%
b. To calculate the variance, we first need to calculate the squared deviations from the expected IRR for each scenario:
Deviation for pessimistic scenario = 9.36% - 22.37% = -13.01%
Squared deviation for pessimistic scenario = (-13.01%)^2 = 1.6921%
Deviation for most likely scenario = 19.74% - 22.37% = -2.63%
Squared deviation for most likely scenario = (-2.63%)^2 = 0.0692%
Deviation for optimistic scenario = 34.73% - 22.37% = 12.36%
Squared deviation for optimistic scenario = (12.36%)^2 = 1.5277%
Then, we calculate the weighted average of the squared deviations using the probabilities of each scenario:
Variance = (0.30 x 1.6921%) + (0.40 x 0.0692%) + (0.30 x 1.5277%) = 0.8194%
c. To calculate the standard deviation, we take the square root of the variance:
Standard deviation = √0.8194% = 0.9047%
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an asset was sold for $50,000 at the end of its useful life of 7 years. the equipment was bought for $400,000. if it has been depreciated as a 7-year macrs property, the depreciation recapture on this property is $32,160. group of answer choices true false
The statement is false. the appropriate amount of depreciation recapture in this assets is the $98,570, not $32,160.
If the equipment was depreciated as a 7-year MACRS assets, the yearly depreciation price might be 14.29% (as in keeping with the MACRS table for the 7-year property). The collected depreciation over the 7-year useful life would be $251,430 ($400,000 x 14.29% x 7).
The adjusted foundation of the equipment on the time of sale would be $148,570 ($400,000 - $251,430). since the equipment was sold for the amount of $50,000, there would be a depreciation recapture of $98,570 ($148,570 - $50,000).
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Madam Wang has a current account in Maybank Berhad. She has withdrawn One Thousand Ringgit (RM1,000.00) from this account via the ATM machine.
Demonstrate the effect of Madam Wang’s withdrawal on the monetary base. (12 marks)
Madam Wang's withdrawal of RM1,000 from her current account in Maybank Berhad via the ATM machine would have a direct effect on the monetary base.
How would the monetary base be affected ?The monetary base is the sum of currency in circulation and the reserves held by banks at the central bank.
When Madam Wang withdrew RM1,000 from her account, this would have resulted in a decrease in the reserves held by Maybank Berhad at the central bank. This is because the bank would need to transfer the required reserves to cover the withdrawal from its own reserves at the central bank.
As a result, the monetary base would also decrease by the same amount. This is because the amount of reserves held by banks at the central bank is a component of the monetary base.
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true or false? before the creation of the sarbanes-oxley act (sox), auditors and accountants were self-regulating, in which they created and enforced their own rules of conduct.
True. Before the Sarbanes-Oxley Act, auditors and accountants were primarily self-regulated through professional organizations such as the AICPA.
Before the introduction of the Sarbanes-Oxley Act (SOX), the auditing and accounting professions were essentially self-regulated. Professional organisations such as the American Institute of Certified Public Accountants (AICPA) developed and enforced their standards of conduct. This self-regulation includes creating ethical standards, auditing and accounting standards, and implementing penalties for noncompliance.
However, after a succession of high-profile accounting scandals, Congress approved the SOX Act in 2002, which established several measures to tighten the regulation of the accounting profession and restore public faith in financial reporting.
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one strong risk associated with using a pioneering strategy is ______.
Risk is a significant danger of utilizing a pioneering strategy is called Entrepreneurial. Customers might not favor the novel good or service.
Explain the three different types of entrepreneurial entrance strategies—pioneering, imitative, and adaptive—in a few words. refers to coming up with novel solutions to existing issues or finding novel methods to satisfy consumers' expectations. Discovering and acting on opportunities includes two stages of work. a new commercial endeavour, frequently based on previous experience.
Most entrepreneurship startups are funded by angel investors. Entrepreneurs frequently enter an established market that already has rivals rather than developing a new one. Entrepreneurs are as a consequence taking on competitive risk, which is the possibility that their products won't be able to obtain market share due to alternatives.
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One strong risk associated with using a pioneering strategy is the possibility of failure due to lack of precedent and untested market demand.
Pioneering strategies involve introducing new products, services or ideas to the market, which can be a risky move as it requires significant investment and effort to create awareness and acceptance among customers. Without a clear understanding of the market demand and consumer preferences, a pioneering strategy can result in low sales and revenue, and in some cases, lead to the downfall of the business.
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Driver distraction contributes between to 50 t 60 percent of all crashes.True or False
The statement is false. Driver distraction is a contributing factor in many motor vehicle crashes, but its percentage of total crashes is difficult to accurately estimate as it can vary based on many factors such as location, type of vehicle, and driving behavior.
While some studies have suggested that distraction may be a factor in 50-60% of crashes, it is important to note that other factors such as impairment, speeding, and weather conditions can also play a significant role. Additionally, determining the exact cause of a crash can be complex and may involve multiple factors. Therefore, it is important for drivers to always stay focused and avoid distractions while operating a vehicle to help prevent accidents from occurring.
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Suppose that 5 years ago the Cisco Company sold a 15-year bond issue, which had a par value of $5,000 and a coupon rate of 7 percent. Interest is paid semiannually. If the required return is 12 percent, what is the price of the bond today? Under what condition is it sold?
a. OR $7,276.70, discounted
b. Or $7,276.70, with premium
c. Or $3,279.40, with premium
d. $3,279.40, discounted
e. OR $7,276.70, per pair
Suppose that 5 years ago the Cisco Company sold a 15-year bond issue, which had a par value of $5,000 and a coupon rate of 7 percent. Interest is paid semiannually. If the required return is 12 percent, period of bond is $3,279.40, and on discounted condition. Correct alternative is d.
Information given in the questions are as follows
Face value = 5000
Coupon rate = 7%
Years to maturity = 10 (since the 15 year bond is issued 5 years ago)
Required return = 12%
Coupon Payment =350
Maturity= 15
Market rate= 12.00%
Number of times compounded= 2
PV(0.12/2,15*2,-350/2,-5000)
= $3,279.40
Since the price of the bond is less than the face value of the bond, the bond is selling at a discount
Answer = $3,279.40, discount
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An investor holds 1 ABC Jan 80 Call. ABC splits 2 for 1. On the ex date, the holder will have:
A
1 ABC Jan 40 Call
B
1 ABC Jan 80 Call
C
2 ABC Jan 40 Calls
D
2 ABC Jan 80 Calls
When a company undergoes a stock split, the number of outstanding shares increases while the price per share decreases proportionally. In this scenario, ABC has split 2 for 1, meaning that for every one share an investor holds, they will now have two shares.
In the case of an options contract, such as the 1 ABC Jan 80 Call held by the investor in question, the terms of the contract may be adjusted to reflect the stock split. In this case, the investor will now hold 2 ABC Jan 80 Calls instead of just one.
This adjustment ensures that the investor's rights and obligations under the options contract remain unchanged after the stock split. The investor still has the right to purchase shares of ABC at the strike price of $80 until the expiration date in January, but now has two options contracts instead of one.
Overall, the stock split has not changed the value of the options contract for the investor, but has instead increased their potential for profit or loss. If the price of ABC's stock were to increase significantly, the investor now has two options contracts to exercise at the lower strike price of $80, potentially increasing their profit.
On the other hand, if the price of ABC's stock were to decrease, the investor now has two options contracts that may be worth less than the original single contract.
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The culture in which the agricultural subsistence strategy expanded rapidly was theA)AnatolianB)NatufianC)PPNAD)PPNB
The correct option is D, The culture in which the agricultural subsistence strategy expanded rapidly was the PPNB, which stands for Pre-Pottery Neolithic B.
This culture emerged in the Levant region of the Near East around 10,000 BCE, after the preceding PPN A period. During the PPNB, people began to cultivate crops such as wheat, barley, lentils, and peas, as well as domesticate animals like goats, sheep, and cattle.
The expansion of agriculture during the PPNB led to significant changes in human societies, including the development of sedentary settlements and the emergence of complex social structures. People were able to produce surplus food, which allowed for the specialization of labor, as some individuals could focus on tasks other than food production, such as crafting or religious rituals.
The PPNB culture also saw the development of new technologies, such as the use of sickles and plows for farming, and the production of pottery for storage and cooking. This period was marked by significant cultural and technological innovations that laid the foundation for future civilizations.
In conclusion, the culture in which the agricultural subsistence strategy expanded rapidly was the PPNB, which emerged in the Near East around 10,000 BCE and saw the development of sedentary settlements, complex social structures, and new technologies.
So the correct option is D
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The culture in which the agricultural subsistence strategy expanded rapidly was the Natufian. This culture was located in the Levant region and is known for their early adoption of agricultural practices, such as the domestication of plants and animals.
The Natufian culture existed during the pre-pottery Neolithic A (PPNA) period, which was a time of significant social and cultural changes in the Middle East.
The culture in which the agricultural subsistence strategy expanded rapidly was the B) Natufian culture.
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subtracting the cost of the investment from the present value of the future cash inflows determines the
Subtracting the cost of the investment from the present value of the future cash inflows determines the net present value (NPV) of the investment.
subtracting the cost of the investment from the present value of the future cash inflows determines the net present value (NPV) of the investment. This is a measure of the profitability of the investment, taking into account the time value of money and the initial cost. A positive NPV indicates that the investment is profitable, while a negative NPV suggests that the investment is not worth pursuing. Therefore, calculating the NPV is an important step in evaluating the potential return on investment for a given project or opportunity.
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you will put your answers into a textbox. be sure to number your answer with the correct question number. you do not have to show your work. a certain country has a money supply of $50. the velocity of money is 10. the quantity of goods being produced is 400. 1. what is the average price of goods in the store for this country (to two places past the decimal point)? now the central bank of this country doubles the money supply (an increase of 100%) to $100. velocity stays the same. the quantity of goods produced rises to 450 goods. 2. what is the new price level (to two places past the decimal point)? 3. what is the inflation rate for this country (to one place past the decimal point)? you answer should be in percent form.
1. The average price of goods in the store for this country is $1.25.
2. The new price level after the central bank doubles the money supply is $2.22.
3. The inflation rate for this country is 77.6%.
1. To calculate the average price of goods, use the equation MV = PQ, where M is the money supply, V is the velocity of money, P is the price level, and Q is the quantity of goods. In this case, M = $50, V = 10, and Q = 400. So, 50 * 10 = P * 400. Solving for P, we get P = $1.25.
2. After the central bank doubles the money supply, M becomes $100, and the quantity of goods produced rises to 450. So, 100 * 10 = P * 450. Solving for P, we get P = $2.22.
3. To find the inflation rate, use the formula (New Price Level - Old Price Level) / Old Price Level * 100%. In this case, the new price level is $2.22 and the old price level is $1.25. So, the inflation rate is (2.22 - 1.25) / 1.25 * 100% = 77.6%.
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