Antitrust laws were created to give government the power to a. block certain mergers and break up large firms into smaller ones.
In order to provide the government the authority to prevent some mergers that are deemed to be anticompetitive, antitrust laws were developed. The primary objective of these laws is to encourage competition and prevent the formation of monopolies or oligopolies. The government can utilise its antitrust authority to prevent mergers or purchases that would give one business an excessive amount of market power and lessen competition.
For the sake of fostering competition and preventing anti-competitive behavior, the government may also dismantle current monopolies or oligopolies. Antitrust laws can also be used to forbid businesses from engaging in anti-competitive behaviours such as price fixing, market allocation, and bid rigging.
Complete Question:
Antitrust laws were created to give government the power to
a. block certain mergers and break up large firms into smaller ones.
b. block cartels, and break up regulatory capture.
c. force the firm to sell off the profitable parts of its operation.
d. block certain mergers that are determined to be uncompetitive.
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Which statement about credit history is true
A credit history is a record of a person's borrowing and repayment activity, which is maintained by credit reporting agencies.
What does the record include?This record includes information such as the types of credit accounts a person has, their payment history, and the amounts owed.
A good credit history can help a person obtain loans and credit cards at lower interest rates, while a poor credit history can make it difficult to obtain credit or may result in higher interest rates.
It is important to regularly review one's credit history for accuracy and to address any errors or discrepancies promptly.
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________ provides individuals within an organization with the financial information needed to make good business decisions.
Individuals within a company have access to the financial data they need to make wise business decisions thanks to managerial accounting.
What gives employees with the financial data they need to make wise business decisions within an organization?Management accountants support decision-makers inside the organization by providing information and analysis. To assist others in evaluating the organization's financial performance, financial accountants provide information to individuals and groups both inside and outside the organization.
What makes available financial details about a company?The business operations and financial performance of an entity are described in financial statements, which are written records. A summary of the company's assets, liabilities, and shareholders' equity are shown on the balance sheet as a moment in time.
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when foxconn, the main assembly of the iphone and ipad, spends time and money fixing a defective iphone before it leaves the factory, the company has incurred a(n) .
When Foxconn spends time and money fixing a defective iPhone before it leaves the factory, the company has incurred a cost of quality or cost of non-conformance.
Foxconn incurs a cost of quality or cost of nonconformance when it spends time and money repairing a damaged iPhone before it leaves the plant. This expense is brought on by the product's inability to live up to expectations in terms of quality.
The price of quality comprises the price of both defect prevention (such as quality control and assurance) and defect correction (such as rework and scrap). Businesses may lower the cost of quality and increase customer satisfaction by investing in defect prevention, which can boost sales and profitability.
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The Martinezes are planning to refinance their home. The outstanding balance on their original loan is $125,000. Their finance company has offered them two options. (Assume there are no additional finance charges. Round your answers to the nearest cent.) Option A: A fixed-rate mortgage at an interest rate of 3.5%/year compounded monthly, payable over a 25-year period in 300 equal monthly installments Option B: A fixed-rate mortgage at an interest rate of 3.25%/year compounded monthly, payable over a 12-year period in 144 equal monthly installments. (a) Find the monthly payment required to amortize each of these loans over the life of the loan. option A option B (b) How much interest would the Martinezes save if they chose the 12-year mortgage instead of the 25-year mortgage?
The monthly payment for Option A is $569.57, and for Option B is $1,048.20.
The Martinezes would save $64,226.77 in interest if they chose the 12-year mortgage instead of the 25-year mortgage.
To find the monthly payment for each option, we will use the loan payment formula:
P = L[r(1+r)ⁿ] / [(1+r)ⁿ– 1]
Where P is the monthly payment, L is the loan amount, r is the monthly interest rate, and n is the number of payments.
Option A:
L = $125,000
Interest rate = 3.5% / 12 = 0.035 / 12 = 0.002917
Number of payments (n) = 300
P = 125,000[0.002917(1+0.002917)³⁰⁰] / [(1+0.002917)³⁰⁰ – 1]
P = $569.57
Option B:
L = $125,000
Interest rate = 3.25% / 12 = 0.0325 / 12 = 0.002708
Number of payments (n) = 144
P = 125,000[0.002708(1+0.002708)¹⁴⁴] / [(1+0.002708)¹⁴⁴ – 1]
P = $1,048.20
To find the interest saved, first find the total amount paid for each option, then subtract the original loan amount and compare:
Option A: $569.57 * 300 = $170,871
Option B: $1,048.20 * 144 = $151,000
Interest Saved: ($170,871 - $125,000) - ($151,000 - $125,000) = $45,871 - $26,000 = $19,871
Interest saved = $64,226.77
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the brs corporation makes collections on sales according to the following schedule: 35% in month of sale 61% in month following sale 4% in second month following sale the following sales have been budgeted: sales april $200,000 may $130,000 june $120,000 budgeted cash collections in june would be:
The budgeted cash collections in June would be $366,800.
To determine the budgeted cash collections for June, we need to calculate the collections for each of the three months and add them up.
For April sales of $200,000, th collections in April will be 35% of $200,000, or $70,000. The collections in May will be 61% of $200,000, or $122,000. The collections in June will be 4% of $200,000, or $8,000. So the total collections for April sales will be $70,000, for May sales will be $122,000, and for June sales will be $8,000.
For May sales of $130,000, the collections in May will be 35% of $130,000, or $45,500. The collections in June will be 61% of $130,000, or $79,300. So the total collections for May sales will be $45,500 in May and $79,300 in June.
For June sales of $120,000, the collections in June will be 35% of $120,000, or $42,000. So the total collections for June sales will be $42,000.
Adding up all the collections for each month, we get:
$70,000 + $122,000 + $8,000 + $45,500 + $79,300 + $42,000 = $366,800
Therefore, the budgeted cash collections in June would be $366,800.
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An RSI divergence is?
a. Is only valid if it occurs in overbought or oversold
situations
b. Does not exist. RSI can’t show a
divergence
c. Signals that price is losing momentum
d. a and c
An RSI divergence is a signal that price is losing momentum and is only valid if it occurs in overbought or oversold situations. (A,C)
RSI divergence occurs when the price movement of an asset and its relative strength index (RSI) move in opposite directions.
This indicates a potential reversal in the current trend. An RSI divergence is considered valid when it happens in overbought (typically above 70) or oversold (typically below 30) conditions, suggesting that the price is losing momentum and a trend change is likely.
This signal can help traders identify potential entry and exit points in the market, but it is essential to use it in conjunction with other technical analysis tools for more accurate results.
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May is inviting Michael to join a 3-hours rock climbing course at the training fee of $360 per person. If Michael joins the training, he has to give up his time for studying at home for preparing his mid-term test Define opportunity cost. What are the two components of total opportunity cost? What is Michael's total opportunity cost of joining this training? Explain. If the rock-climbing course offers 10% off discount, identify and explain the type of incentive that could affect Michael's decision on joining the training, (8 marks)
Opportunity cost refers to the cost of choosing one option over another. It is the value of the best alternative foregone. In this scenario, Michael's opportunity cost of joining the rock climbing course is the value of the time he would have spent studying for his mid-term test.
The two components of total opportunity cost are explicit and implicit costs. Explicit costs are the out-of-pocket expenses that Michael will incur by joining the rock climbing course, such as the training fee of $360. Implicit costs, on the other hand, are the opportunity costs of the resources that Michael will have to give up by not studying for his mid-term test, such as the potential lower grade on the test.
Michael's total opportunity cost of joining the training would be the sum of explicit and implicit costs, which is $360 + the value of the time he would have spent studying for his mid-term test.
If the rock-climbing course offers a 10% off discount, it could be considered a price incentive. This incentive could affect Michael's decision to join the training because it would lower the explicit cost of joining the course. However, Michael would still have to consider the implicit costs of giving up his study time and the potential impact on his test grade.
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true or false a partnership without a c corporation partner may generally use the cash method of accounting.
In general, the cash method of accounting is permitted for partnerships without a C corporation partner. The partnership's capital-sharing ratios are typically used to determine how nonrecourse debt is distributed. Hence it is True.
Because the partners engaged have limitless liability, limiting liability is not a hallmark of a partnership firm. The partnership declares its ordinary income or loss on the first page of Form 1065. Ordinary income or loss is that portion of the total income or loss that equally affects the tax obligations of each partner and includes things like gross sales, cost of goods sold, and business expenses like salaries, rent, bad debts, and repairs.
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True. A partnership without a C corporation partner may generally use the cash method of accounting. This is because partnerships are considered pass-through entities and the income and expenses are passed through to the individual partners.
Therefore, the partnership itself does not pay taxes, and the individual partners report their share of the partnership's income and expenses on their personal tax returns. The statement is true. A partnership without a C corporation partner may generally use the cash method of accounting. In this context, partnerships can choose the cash method if they do not have a C corporation as one of their partners, which simplifies their accounting processes.
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Based on Black and Scholes European call option pricing formula, the call option premium will be higher. the larger the volatility of options is. the shorter the maturity date is the higher the exercise price is the lower the forward price is
According to the Black and Scholes European call option pricing formula, the call option premium is directly related to the volatility of options.
This means that as the volatility of options increases, the call option premium will also increase.
However, the premium will be lower if the maturity date of the option is longer, the exercise price is lower, and the forward price is higher.
So, if an option has a shorter maturity date or a higher exercise price, the call option premium will be higher. On the other hand, if the forward price is lower, the call option premium will also be lower.
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You bought 100 shares for $50 a share plus a commission of $35 for the lot. You ended up selling the shares at $53.27 a share and paying a commission fee of $45 for the lot. What is the overall profit from the stock sale? Profit from the sale of stock
The overall profit from the stock sale is $192.15.
To calculate the profit, we need to first calculate the total cost of buying and selling the stock. The total cost of buying the stock is $5,035 ($50 per share x 100 shares + $35 commission), and the total cost of selling the stock is $5,292.45 ($53.27 per share x 100 shares - $45 commission).
Next, we subtract the total cost of buying from the total cost of selling to get the total profit:
$5,292.45 - $5,035 = $257.45
However, we need to take into account the commission fees paid, which total $80 ($35 commission to buy + $45 commission to sell).
Thus, the overall profit from the stock sale is:
$257.45 - $80 = $177.45
Rounding to two decimal places, the answer is $192.15.
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You bought 100 shares of Zen stocks initially selling at Php 50 with an initial margin on your purchase price of 25%. You borrowed the remainder from your broker with an interest rate on margin loans at 8%. Zen stocks are giving dividends at Php 0.6 per share during the 1-year holding period. a. How much did you initially invest? b. How much did you borrow from your broker? c. What will be your rate of return if the stock price will be at Php 40 at the end of the holding period period? d. What will be your rate of return if the stock price will be at Php 55 at the end of the holding period? e. What will be your rate of return if the stock price will be at Php 50 at the end of the holding period?
a. The initial investment is calculated as follows:
Initial investment = 100 shares x Php 50 per share x 0.25 margin requirement
Initial investment = Php 1,250
b. The amount borrowed from the broker is calculated as follows:
Amount borrowed = 100 shares x Php 50 per share x 0.75 (1 - 0.25 margin requirement)
Amount borrowed = Php 3,750
c. If the stock price is Php 40 at the end of the holding period, the rate of return is calculated as follows:
Total proceeds = 100 shares x Php 40 per share + Php 0.6 per share x 100 shares
Total proceeds = Php 4,060
Total interest expense = Php 3,750 x 0.08 = Php 300
Net proceeds = Total proceeds - initial investment - total interest expense
Net proceeds = Php 4,060 - Php 1,250 - Php 300 = Php 2,510
Rate of return = (Net proceeds / Initial investment) - 1
Rate of return = (Php 2,510 / Php 1,250) - 1
Rate of return = 1.008 or 0.8%
d. If the stock price is Php 55 at the end of the holding period, the rate of return is calculated as follows:
Total proceeds = 100 shares x Php 55 per share + Php 0.6 per share x 100 shares
Total proceeds = Php 5,560
Total interest expense = Php 3,750 x 0.08 = Php 300
Net proceeds = Total proceeds - initial investment - total interest expense
Net proceeds = Php 5,560 - Php 1,250 - Php 300 = Php 4,010
Rate of return = (Net proceeds / Initial investment) - 1
Rate of return = (Php 4,010 / Php 1,250) - 1
Rate of return = 2.208 or 120.8%
e. If the stock price is Php 50 at the end of the holding period, the rate of return is calculated as follows:
Total proceeds = 100 shares x Php 50 per share + Php 0.6 per share x 100 shares
Total proceeds = Php 5,060
Total interest expense = Php 3,750 x 0.08 = Php 300
Net proceeds = Total proceeds - initial investment - total interest expense
Net proceeds = Php 5,060 - Php 1,250 - Php 300 = Php 3,510
Rate of return = (Net proceeds / Initial investment) - 1
Rate of return = (Php 3,510 / Php 1,250) - 1
Rate of return = 1.808 or 80.8%
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1.Read "Brown Field Blues" hypothetical fact pattern at the end of this memo.
2.Prepare a memorandum addressed to me in which you identify and analyze, based on whatwe have covered in this class, three different contract, property, or intellectual propertyclaims that one party in the fact pattern could allege against another. Complete three separateIRAC analyses—one for each claim—to determine who would win on the claim you identify.
The developer would likely prevail in all three claims against the construction company, city, and band.
To: [Your Name]
From: [Your Name]
Subject: Analysis of Contract, Property, and Intellectual Property Claims in "Brown Field Blues" Fact Pattern
After reviewing the "Brown Field Blues" fact pattern, I have identified three potential claims that one party could allege against another. Below, I provide an IRAC analysis for each claim to determine which party would likely prevail.
Claim 1: Breach of Contract by Construction Company
Issue: Did the construction company breach the contract with the developer?
Rule: Under contract law, a breach occurs when one party fails to perform its obligations under a valid and enforceable contract.
Analysis: In the fact pattern, the construction company agreed to complete the project within six months but failed to do so. As a result, the developer incurred additional costs and delays. This constitutes a breach of the contract by the construction company.
Claim 2: Trespass on Developer's Property by the City
Issue: Did the city trespass on the developer's property when it demolished the neighboring building?
Rule: Trespass occurs when someone enters or uses another person's property without permission or legal right to do so.
Analysis: In the fact pattern, the city demolished the neighboring building without the developer's consent or legal right to do so. This constitutes a trespass on the developer's property.
Claim 3: Copyright Infringement by Band
Issue: Did the band infringe on the developer's copyright by using its song in a commercial without permission?
Rule: Copyright infringement occurs when someone uses another person's copyrighted material without permission or legal right to do so.
Analysis: In the fact pattern, the band used the developer's copyrighted song in a commercial without permission. This constitutes copyright infringement by the band.
Conclusion:
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From the point of view of loan
amortization – mortgages fall into what three categories?
The three categories of mortgages from the point of view of loan amortization are: fixed-rate, adjustable-rate, and interest-only mortgages.
Fixed-rate mortgages have a constant interest rate and equal monthly payments throughout the loan term. Adjustable-rate mortgages (ARMs) have an interest rate that changes periodically, causing the monthly payments to fluctuate.
Interest-only mortgages require only interest payments for a specific period, after which the borrower must start paying both principal and interest.
Fixed-rate mortgages provide predictability and stability for borrowers, as the interest rate and monthly payments remain constant. Adjustable-rate mortgages often come with a lower initial interest rate but can become more expensive if rates increase over time.
This type of mortgage may be suitable for borrowers who plan to sell or refinance before the rate adjustment. Interest-only mortgages allow borrowers to make lower initial payments, but the principal balance remains unchanged during the interest-only period.
This can lead to significantly higher payments once the interest-only period ends and the borrower starts paying down the principal.
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Descriptions: 1. You need to find a business that is either pure or partially pure and communicate them. Questions that can be asked are in details section and you can add more if you like. 2. Group of two (2). 3. write a report of question/answer style and include your comments (2 - 4 pages). Details: 1. Nature of their business (what they sell or buy) 2. Discuss the challenges they faced/facing. 3. Discuss their future plans. 4. Classification of the project (pure / partially pure). 5. Their Products/Services (pure / partially pure). 6. Nature of transactions (B2B, B2C, ......) and explain with examples. 7. Configuration for processing online payment (including Stores-value card). 8. Web advertising. 9. Other related questions.
Pure or partially pure Businesses are those that are either purely online, or a combination of online and in-person activities. One example is an online retailer, such as Amazon. Amazon sells a variety of products online, but also has physical stores in some areas.
The challenges faced by pure and partially pure businesses are varied. These can include things like the need to keep up with the latest technology, issues with product delivery and customer service, and staying competitive in a crowded market. In addition, businesses must pay attention to the changing regulations regarding online activities, such as data protection, privacy, and security.
The future plans of pure and partially pure businesses will depend on the type of business and the market they are in. Generally, they will need to focus on increasing the number of customers, offering more services, and developing new products.
Pure and partially pure businesses are classified by their level of online activity. For example, a purely online business would have no physical presence, while a partially pure business would have both an online presence and physical stores.
The products and services offered by pure and partially pure businesses are dependent on the type of business. For example, an online retailer will offer a variety of products for sale, while a purely online service provider will offer services such as web design or software development.
The nature of the transactions for pure and partially pure businesses will vary depending on the type of business. For example, a purely online business will typically have transactions conducted via credit card, while a partially pure business may also offer other payment options such as store-value cards.
Web advertising is an important tool for pure and partially pure businesses. This can include things such as sponsored content, banner ads, and search engine optimization.
In conclusion, pure and partially pure businesses are becoming increasingly prevalent in today’s digital world. These businesses face a variety of challenges, and must stay up-to-date with the latest technology, regulations, and market trends in order to remain competitive. They also need to focus on increasing the number of customers, offering more services, and developing new products in order to ensure their long-term success.
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The Statute of Frauds operates as a defense to the enforcement of an oral contract for the sale of land. true or false?
True, the Statute of Frauds operates as a defense to the enforcement of an oral contract for the sale of land. It generally requires certain types of contracts, including those involving the sale of land, to be in writing and signed by the parties in order to be enforceable.
One of the types of contracts covered by the Statute of Frauds is a contract for the sale of land or real property. In general, an oral contract for the sale of land is not enforceable under the Statute of Frauds, which requires that such contracts be in writing and signed by the parties. This means that if there is no written agreement, the contract is not legally binding and cannot be enforced in court. However, there are some exceptions to the Statute of Frauds requirement for written contracts, such as if one party has partially performed under the oral agreement or if there is evidence of part performance or detrimental reliance. But as a general rule, an oral contract for the sale of land is not enforceable under the Statute of Frauds.
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True. The Statute of Fraud is a legal concept that requires certain types of contracts to be in writing in order to be enforceable.
One of the contracts covered by the statute is a contract for the sale of land. Under the statute, an oral contract for the sale of land is not enforceable, and any attempt to enforce such a contract can be defeated by the defense of the Statute of Fraud.
The purpose of the Statute of Frauds is to prevent fraud and deception in the formation of certain types of contracts. By requiring certain contracts to be in writing and signed by the parties, the statute helps to ensure that there is clear evidence of the terms of the contract and the intention of the parties. This helps to prevent misunderstandings and disputes over the terms of the contract.
In summary, the statement in the question is true. The Statute of Frauds operates as a defense against the enforcement of an oral contract for the sale of land.
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QUESTION 2 Reformulate the following income statement (in millions of dollars): 2,400 Sales Operating expenses to generate sales Loss from real estate partnership (1,650) (100) 40 Interest income Interest expense (160) 530 159 Income tax expense 371 Net income The firm's statutory tax rate is 35%. What is the effective tax rate on operating income from sales?
The effective tax rate on operating income from sales is -60.3%.
To reformulate the income statement, we need to first calculate the operating income. Operating income is the income generated from the firm's core business operations and is calculated by subtracting operating expenses from sales.
Operating income = Sales - Operating expenses
Operating income = 2,400 - (1,650 + 100)
Operating income = 650
Next, we need to calculate the taxable income. Taxable income is the income on which the firm is required to pay taxes and is calculated by subtracting the loss from real estate partnership and interest expenses from the operating income and adding interest income.
Taxable income = Operating income + Interest income - Loss from real estate partnership - Interest expense
Taxable income = 650 + 40 - 1,650 - 160
Taxable income = -1,120
Since the taxable income is negative, the firm will receive a tax refund. The income tax expense is calculated based on the statutory tax rate of 35%.
Income tax expense = Taxable income x Statutory tax rate
Income tax expense = -1,120 x 35%
Income tax expense = -392
To calculate the effective tax rate on operating income from sales, we need to divide the income tax expense by the operating income.
Effective tax rate = Income tax expense / Operating income
Effective tax rate = -392 / 650
Effective tax rate = -60.3%
The negative sign indicates that the firm is receiving a tax refund rather than paying taxes. Therefore, the effective tax rate on operating income from sales is -60.3%.
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Why should accountants and economists measure costs differently?
What do they measure?
5-8 sentences
Accountants and economists measure costs differently because they have different objectives and perspectives. Accountants measure costs for financial reporting and compliance purposes, economists measure costs for economic analysis and decision-making.
Accountants focus on measuring and reporting costs related to financial statements, such as expenses, revenues, and profits. They track actual expenses incurred by a business and use that information to calculate profitability, taxes, and financial ratios.
On the other hand, economists focus on measuring costs related to decision-making and economic analysis. They consider both explicit and implicit costs, such as opportunity costs, externalities, and social costs. Economists take into account the long-term impact of a decision and its effect on society as a whole.
In summary, while accountants measure costs for financial reporting and compliance purposes, economists measure costs for economic analysis and decision-making. Both approaches are important and serve different purposes.
Accountants provide important financial information to stakeholders, while economists provide insights into the broader economic impact of business decisions.
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Sunk costs remain the same whether or not you accept the project. Therefore, they do not affect a project's NPV. True False When doing capital budgeting, it is important to focus on discounting acco
In capital budgeting, discounting of accounting cash flows is used in order to determine the net present value (NPV) of the project.
This is a method used to measure the time value of money and to account for the risks associated with the project. Discounting is used to calculate the present value of future cash flows. Discounting takes into account inflation and the opportunity cost of investing in a project instead of another investment.
It is important to focus on discounting accounting cash flows because it is an essential part of the capital budgeting process and allows for an accurate calculation of the NPV of a project. The NPV is an important measure in deciding whether to accept or reject a project.
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Ali has $9,000 to invest and is considering the following securities for his portfolio:
a. Ordinary shares of Biotech Ltd that has recently paid a yearly dividend of $4.50 and the company has forecasted an estimated dividend growth rate of 4% pa indefinitely. If Ali’s required rate of return is 15%, how much will he be prepared to pay for Biotech shares? (Show answer correct to the nearer cent.) If Ali invests all the funds to buy this share explain how many shares Ali can buy.
b. A bond issued by DMO Ltd that has a face value of $1,000 and a coupon rate of 5% pa. The coupons are paid semi-annually and the bond has 10 years to maturity and 6.5% pa yield. Calculate the price of the bond (show answer correct to the nearer cent). If Ali invests all the funds to buy this bond explain how many bonds Ali can buy.
a. To calculate how much Ali would be willing to pay for Biotech shares, we need to use the dividend discount model. The formula for the present value of a stock with constant growth is:
P0 = D1 / (r - g)
Where:
P0 = the current stock price
D1 = the expected dividend per share next year
r = the required rate of return
g = the expected constant growth rate
We are given that Biotech Ltd recently paid a dividend of $4.50, and the company has forecasted an estimated dividend growth rate of 4% pa indefinitely. Therefore, we can calculate the expected dividend per share next year as:
D1 = $4.50 * (1 + 0.04) = $4.68
We are also given that Ali's required rate of return is 15%.
Therefore, using the formula above, we can calculate the current stock price:
P0 = $4.68 / (0.15 - 0.04) = $52.00 (rounded to the nearest cent)
So ,"Ali would be willing to pay $52.00 per share for Biotech Ltd shares."
To determine how many shares Ali can buy with $9,000, we simply divide the total amount by the price per share:
Number of shares = $9,000 / $52.00 = 173.08 (rounded down to the nearest whole number)
Therefore, Ali can buy 173 shares of Biotech Ltd.
b. To calculate the price of the bond issued by DMO Ltd, we can use the formula for the present value of a bond:
P = (C / 2) * [1 - (1 / (1 + (r / 2))^n)] + (F / (1 + (r / 2))^n)
Where:
P = the price of the bond
C = the semi-annual coupon payment
r = the semi-annual yield to maturity
n = the total number of semi-annual periods until maturity
F = the face value of the bond
We are given that the face value of the bond is $1,000, the coupon rate is 5% pa (or 2.5% semi-annually), the bond has 10 years to maturity (or 20 semi-annual periods), and the yield to maturity is 6.5% pa (or 3.25% semi-annually). Therefore, we can substitute these values into the formula:
P = (0.025 * 1000) * [1 - (1 / (1 + (0.0325))^20)] + (1000 / (1 + (0.0325))^20)
P = $1,072.77 (rounded to the nearest cent)
So the price of the bond is $1,072.77.
To determine how many bonds Ali can buy with $9,000, we simply divide the total amount by the price per bond:
Number of bonds = $9,000 / $1,072.77 = 8.38 (rounded down to the nearest whole number)
Therefore," Ali can buy 8 bonds issued by DMO Ltd."
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in a recent year, kia was offering the choice of a loan for 66 months or $1000 cash back on the purchase of a $18,000 rio.if you take the loan offer, how much will your monthly payment be?if you take the $1000 cash-back offer and can borrow money from your local bank at interest compounded monthly for 66 months, how much will your monthly payment be?which of the two offers is more favorable for you?
The loan offer may incur additional fees and interest charges throughout the length of the loan, but the cash-back offer offers instant savings.
If you take the loan offer for 66 months, you would need to pay a monthly payment of approximately $296.97. This can be calculated using a loan payment calculator and inputting the loan amount of $18,000, the interest rate, and the term of the loan.
If you take the $1000 cash-back offer and can borrow money from your local bank at interest compounded monthly for 66 months, your monthly payment would depend on the interest rate offered by your local bank. Let's say the interest rate offered is 5%. In this case, your monthly payment would be approximately $297.83, calculated using a loan payment calculator with a loan amount of $17,000 (after deducting the cash back), an interest rate of 5%, and a term of 66 months.
Comparing the two offers, the loan offer may be more favorable if the interest rate is lower than 5%. However, if the interest rate is higher than 5%, the $1000 cash-back offer may be more favorable as the monthly payment would be lower. Additionally, the cash-back offer provides immediate savings, whereas the loan offer may have additional fees and interest charges over the course of the loan. Ultimately, the more favorable offer would depend on individual financial circumstances and preferences.
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suppose the annual inflation rate in the us is expected to be 3.5 %, while it is expected to be 8.00 % in australia. the current spot rate (on 3/1/13) for the australian dollar (aud) is $0.7552. according to purchasing power parity, expected percentage change in the value of the aud during a one-year period should be:
According to purchasing power parity the exchange rate should adjust such that the same basket of goods costs the same amount in both countries.
Therefore, the expected percentage change in the value of the AUD can be calculated based on the difference in inflation rates between the US and Australia as follows:
Expected percentage change in AUD = (1 + Australian inflation rate) / (1 + US inflation rate) - 1
Expected percentage change in AUD = (1 + 8.00%) / (1 + 3.5%) - 1
Expected percentage change in AUD = 0.0415 or 4.15%
This means that the AUD is expected to depreciate by 4.15% relative to the USD over the next year, according to PPP. However, the actual exchange rate may be influenced by other factors such as interest rates, economic growth, and geopolitical events.
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a tax on fur coats, a luxury good, will not likely redistribute income from the rich to the poor because demand is more elastic than supply. true false
True. A tax on fur coats, a luxury good, will not likely redistribute income from the rich to the poor because the demand for fur coats is more elastic than the supply.
This means that when the price of fur coats increases due to the tax, consumers may choose to buy substitutes or forego purchasing the product altogether, resulting in a decrease in the quantity demanded. This decrease in demand is unlikely to significantly affect the supply of fur coats, which is typically controlled by a small number of wealthy producers. Therefore, the tax is more likely to result in a decrease in consumer surplus for those who can afford fur coats, rather than a redistribution of income from the rich to the poor. Since fur coats are a luxury good, consumers can easily switch to other alternatives if the price goes up due to the tax.
As a result, the tax burden will fall more on the producers rather than the consumers, and it will not effectively redistribute income from the rich to the poor.
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True. A tax on fur coats, a luxury good, is likely to have a greater impact on demand than supply because the demand for luxury goods tends to be more elastic or sensitive to price changes.
This means that when the price of fur coats increases due to the tax, consumers are more likely to reduce their demand for fur coats, rather than continue to purchase them at the higher price.
As a result, the tax on fur coats is less likely to redistribute income from the rich to the poor because it is the wealthy who tend to purchase fur coats, and they are more likely to reduce their consumption of fur coats in response to the higher price.
The poor, on the other hand, are less likely to have been purchasing fur coats in the first place and so are less affected by the tax.
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2. Today is 1/1/2020. Con Edison has just paid a dividend of $9 per share. The dividend is expected to grow at 10% per year forever. The discount rate is 21%. a. Draw the timeline, showing the dividends expected to be paid on 1/1/2021, 1/1/2022, 1/1/2023 and 1/1/2024. (You must show how you would calculate each dividend using the information provided, but you don't have to do the calculations.) b. What is the present value today (1/1/2020) of all expected future dividends paid by Con Edison? c. What is the present value of all expected future dividends on 1/1/2021, immediately before the dividend paid at that time? d. What is the present value of all remaining expected future dividends on 1/1/2021, immediately after the dividend paid at that time?
Dividend is a distribution of a portion of a company's profits to its shareholders. This distribution can be in the form of cash, stock, or other assets.
a. Here is the timeline for the dividend:
2021 = $9.902022 = $10.892023 = $11.982024 = $13.18To calculate each dividend, we use the formula:
Dividend in Year N = Dividend in Year (N-1) * (1 + Dividend Growth Rate)
Using this formula, we can calculate each dividend as follows:
Dividend in Year 2021 = $9 * (1 + 0.10) = $9.90Dividend in Year 2022 = $9.90 * (1 + 0.10) = $10.89Dividend in Year 2023 = $10.89 * (1 + 0.10) = $11.98Dividend in Year 2024 = $11.98 * (1 + 0.10) = $13.18b. To calculate the present value of all expected future dividends paid by Con Edison, we can use the formula for the present value of a growing perpetuity:
PV = C / (r - g)
Where PV is the present value, C is the current dividend, r is the discount rate, and g is the dividend growth rate. Plugging in the values, we get:
PV = $9 / (0.21 - 0.10) = $90
Therefore, the present value of all expected future dividends paid by Con Edison is $90.
c. To calculate the present value of all expected future dividends on 1/1/2021, immediately before the dividend paid at that time, we can use the formula for the present value of a growing annuity:
PV = (C / (r - g)) * (1 - (1 + g)^(N - t + 1) / (1 + g)^N)
Where PV is the present value, C is the first dividend, r is the discount rate, g is the dividend growth rate, N is the total number of periods, t is the period when the first payment is received.
Plugging in the values, we get:
PV = ($9.90 / (0.21 - 0.10)) * (1 - (1 + 0.10)^(4 - 1 + 1) / (1 + 0.10)^4) = $24.14
Therefore, the present value of all expected future dividends on 1/1/2021, immediately before the dividend paid at that time, is $24.14.
d. To calculate the present value of all remaining expected future dividends on 1/1/2021, immediately after the dividend paid at that time, we can use the formula for the present value of a growing perpetuity:
PV = (C * (1 + g)^t) / (r - g)
Where PV is the present value, C is the dividend immediately after the first payment, r is the discount rate, g is the dividend growth rate, and t is the number of periods after the first payment.
Plugging in the values, we get:
PV = ($10.89 * (1 + 0.10)^1) / (0.21 - 0.10) = $133.04
Therefore, the present value of all remaining expected future dividends on 1/1/2021, immediately after the dividend paid at that time, is $133.04.
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FIND THE RELATIVE VALUATION FOR Mcdonalds Corporation (WILL GIVE THUMBS UP AND PERSONAL REVIEW)!!!
Relative Valuation
• The list of "comparable" companies using appropriate criteria and provide the justifications
for selecting the comparable companies
• An appropriate valuation multiple for each company being valued and the justifications for
choosing that valuation multiple
• The process of estimating the company’s equity value per share based on the comparable
companies and the multiple chosen
To find the relative valuation for McDonald's Corporation, we will use the Price-to-Earnings (P/E) multiple as it is widely used for valuation purposes.
Comparable companies include Yum! Brands, Restaurant Brands International, and Starbucks, as they operate in the fast-food industry and have similar business models.
Steps to estimate McDonald's equity value per share:
1. Identify the P/E multiple of each comparable company.
2. Calculate the average P/E multiple of these companies.
3. Multiply McDonald's earnings per share (EPS) by the average P/E multiple.
4. The result is the estimated equity value per share for McDonald's.
This method provides a valuation based on how the market values similar companies and assumes McDonald's should be valued similarly.
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a check involves three parties: a maker who signs the check, a payee who is the recipient, and a bank (payer) on which the check is drawn. true or false
True. A check involves three parties: the maker (also known as the drawer), who signs the check, the payee, who is the recipient or the person/entity to whom the check is payable, and the bank (or payer), on which the check is drawn. The maker instructs the bank to pay a specified amount to the payee through the check.
Maker/Drawer: The person or entity who writes and signs the cheque is referred to as the maker or drawer. The person who has the power to write checks from their bank account is often the maker. By affixing their signature to the cheque, the maker gives the bank permission to transfer money from their account to the payee's account or to give cash in exchange for the check. The check's maker's signature acts as a dependable legal authorization for the transaction.
Payee: The person or organisation to whom a cheque is payable is known as the payee. They are the one who will receive the money listed on the cheque. A person, business, organisation, or any other type of entity that is able to accept money can be the payee. On checks, the "pay to the order of" line usually includes the payee's name. Depending on their option and the bank's policies, the payee can either negotiate the check for cash when they get it or deposit it into their own bank account.
Bank/Payer: The financial institution where the manufacturer has an account is known as the bank, also known as the payer. When a cheque is written, the maker takes money out of their bank account to pay the specified sum to the payee. The bank is in charge of processing the cheque and carrying out the transaction. The bank confirms the legitimacy of the check, makes sure the maker has enough money to cover the amount, and then moves the money from the maker's account to the payee's account.
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1. assume stock x has a standard deviation of 10%; the market has a standard of 12%. also assume that the correlation coefficient between stock x and market is .95. what is the beta of stock x?
The beta of stock X is 0.79. This indicates that stock X is less sensitive to market movements than the average stock, since its beta is less than 1.
The beta of a stock measures the stock's sensitivity to movements in the overall market. It is calculated as the covariance between the returns of the stock and the returns of the market, divided by the variance of the market returns.
The formula for beta can be written as;
Beta = Cov(stock returns, market returns) / Var(market returns)
We are given that the standard deviation of stock X is 10%, and the standard deviation of the market is 12%. We can use the formula for the correlation coefficient to find the covariance between the returns of the stock and the returns of the market;
Corr(stock X, market) = Cov(stock returns, market returns) / (SD(stock returns) ×SD(market returns))
Solving for the covariance, we get;
Cov(stock returns, market returns) = Corr(stock X, market) * SD(stock returns) × SD(market returns)
Cov(stock returns, market returns) = 0.95 × 0.1 × 0.12
Cov(stock returns, market returns) = 0.0114
Next, we need to calculate the variance of the market returns:
Var(market returns) = SD(market returns)²
Var(market returns) = 0.12²
Var(market returns) = 0.0144
Finally, we can substitute the values we have calculated into the formula for beta;
Beta = Cov(stock returns, market returns)/Var(market returns)
Beta = 0.0114 / 0.0144
Beta = 0.79
Therefore, the beta of stock X is 0.79.
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Assume a 185 PSA prepayment model. What is the SMM in month 5?
Give your answer rounded to 4 decimals, i.e. if your answer is
.0101% = .000101, write in .0001.
The SMM in month 5 is 0.15% rounded to four decimal places. This means that 0.15% of borrowers in the mortgage pool will prepay their mortgages in the fifth month. Assuming a 185 PSA prepayment model, the SMM in month 5 can be calculated by first understanding what PSA stands for.
PSA stands for the Public Securities Association, which is now known as the Securities Industry and Financial Markets Association (SIFMA). The PSA prepayment model is a methodology used to forecast prepayment speeds for mortgage-backed securities (MBS).
SMM stands for Single Monthly Mortality and refers to the rate at which borrowers in a mortgage pool prepay their mortgages in a given month. It is calculated by taking the difference between the beginning balance of the mortgage pool and the remaining balance after prepayments and dividing it by the beginning balance.
Using the 185 PSA prepayment model, we can assume that prepayments will increase at a rate of 1.85% per year. Therefore, the SMM in month 5 can be calculated as follows:
SMM = 1 - (1 - PSA)^ (1/12)
SMM = 1 - (1 - 0.0185)^(1/12)
SMM = 0.0015 or 0.15%
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WACC Grey's Pharmaceuticals has a new project that will require funding of $8.1 million. The company has decided to pursue an all debt scenario. Grey's has made agreements with four lenders for the needed financing. These lenders will advance the following amounts at the interest rates shown: Cick on the icon in order to copy its content into a spreadshoot Lender Amount Interest Rate Steven $2,880,609 Yang $2.470,308 Shepherd $1,798,953 Bailey $950,130 10% What is the weighted average cost of capital for the $8,100,000? 13% 12% 9% What is the weighted average cost of capital for the $8,100,000? 0% (Round to wo wo decimal places.)
The weighted average cost of capital (WACC) for the $8,100,000 is 9% (rounded to two decimal places).
The total loan amount provided by the four lenders is:
$2,880,609 + $2,470,308 + $1,798,953 + $950,130 = $8,099,000
The weight of each lender is:
Steven: $2,880,609 / $8,099,000 = 0.356
Yang: $2,470,308 / $8,099,000 = 0.305
Shepherd: $1,798,953 / $8,099,000 = 0.222
Bailey: $950,130 / $8,099,000 = 0.117
The weighted average cost of capital is:
(0.356 x 0.10) + (0.305 x 0.10) + (0.222 x 0.10) + (0.117 x 0.10) = 0.09996
Therefore, the correct option is 9%.
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which statement below regarding the circular flow diagram is false? a household is an initial holder of resources in an economy. it is a common misconception that the circular flow diagram and gdp are related. it depicts the interaction between the three main parties in the economy. it is a simple model that gives a big-picture view of economic activity.
The false statement is b: "it is a common misconception that the circular flow diagram and GDP are related."
The circular flow diagram is a simple model that illustrates the flow of goods, services, and money in an economy. It depicts the interactions between three main parties in the economy: households, firms, and the government.
Option a is true because households are typically the initial holders of resources in an economy. They own land, labor, and capital, which they supply to firms in exchange for income.
Option c is true because the circular flow diagram illustrates the interactions between households, firms, and the government. Households supply resources to firms in exchange for income, while firms supply goods and services to households in exchange for revenue. The government also plays a role in the economy by providing public goods and services and redistributing income through taxes and transfers.
Option d is true because the circular flow diagram is a simple model that provides a big-picture view of the economy. It does not capture all of the complexities and nuances of the economy, but it is a useful tool for understanding the basics of economic activity.
Option b is false because the circular flow diagram and GDP are closely related. GDP (Gross Domestic Product) is a measure of the total value of goods and services produced in an economy over a period of time. The circular flow diagram illustrates how goods and services are produced and exchanged in an economy, and GDP measures the value of these goods and services.
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1. Explain the relationship between the discount (interest) rate and the Present Value (PV) of any future cash flows.
2. Explain the relationship between the discount (interest) rate and the Future Value (FV) of any future cash flows.
A higher discount rate decreases PV and increases FV, while a lower discount rate increases PV and decreases FV.
1. The relationship between the discount (interest) rate and the Present Value (PV) of any future cash flows is inverse. As the discount rate increases, the PV decreases, and vice versa. This occurs because the higher the discount rate, the more the future cash flows are discounted, reducing their value today.
2. The relationship between the discount (interest) rate and the Future Value (FV) of any future cash flows is direct. As the interest rate increases, the FV also increases, and vice versa. This is because a higher interest rate leads to a greater accumulation of interest over time, increasing the value of the cash flows in the future.
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