Brett creative media is expected to pay dividends at the end of the next three years of $0.5 $1.5 $2 respectively after three years the dividend is expected to grow at a 5% constant annual rate forever if the required rate of return on this stock is 10% what is the current stock price?

Answers

Answer 1

The current stock price of Brett Creative Media is $32.06

How to calculate current stock price?

To calculate the current stock price, we need to find the present value of all the future dividends and the perpetuity. We can use the following formula:

P = [tex]\frac{D1}{(1+r)^{1} }[/tex]+ [tex]\frac{D2}{(1+r)^{2} }[/tex]+ [tex]\frac{D3}{(1+r)^{3} }[/tex] + [tex]\frac{D4 }{(r-g) * (1+r)^{3} }[/tex]

Where:

P = current stock price

D1, D2, D3 = dividends expected to be paid at the end of year 1, 2, and 3, respectively

D4 = the perpetual dividend expected after year 3

r = required rate of return

g = expected constant annual growth rate

Substituting the given values:

P = [tex]\frac{0.5 }{(1+0.1)^{1} }[/tex] + [tex]\frac{1.5 }{(1+0.1)^{2} }[/tex]+ [tex]\frac{2 }{(1+0.1)^{3} }[/tex]+ [tex]\frac{2 * 1.05}{(0.1-0.05) * (1+0.1)^{3} }[/tex]

P = 0.4545 + 1.2397 + 1.653 + 28.714

P = 32.0612

Therefore, the current stock price of Brett Creative Media is $32.06

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Related Questions

Sean's boss asks him to write an email message to all employees to tell them how to request computer help This message will be an example of
a) internal-operational communication
b) external-operational communication
c) personal communication
d) both internal-operational and external-operational communication
e) both internal-operational and personal communication

Answers

The message that Sean writes to all employees to tell them how to request computer help is an example of option A- internal-operational communication

Internal-operational communication is communication that takes place within an organization and is related to the day-to-day operations of the business. In this case, Sean's message to all employees is focused on providing information about how to request computer help, which is a part of the daily operations of the organization.

Internal-operational communication is an important aspect of running a successful organization because it ensures that everyone is informed about what is happening within the company and that they are aware of their roles and responsibilities. It can take many forms, including emails, memos, phone calls, meetings, and more.

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if a market for a product has no external impacts, then the market supply accounts for ___________ of the marginal costs to society of producing this product.

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If there are no external effects on a market for a product, then the market supply covers all of the marginal costs to society of providing that product.

The cost of manufacturing and selling this product, including all internal and external costs related to its production, is represented by the market supply curve in this instance.

Private costs are those incurred by the producers and consumers who are directly involved in the market transaction, whereas external costs are those incurred by third parties who are not directly associated with the transaction but may nevertheless be impacted by the production or consumption of the good.

When there are no external effects, the societal and private costs of production are identical.

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If a market for a product has no external impacts, then the market supply accounts for ""all"" of the marginal costs to society of producing this product.

In economics, the market supply refers to the total amount of a product that all producers are willing and able to offer for sale at a given price level. The supply curve represents the relationship between the price of a product and the quantity that suppliers are willing to produce and offer for sale in the market.

When a market has no external impacts, it means that the production and consumption of the product do not affect any third party beyond the buyers and sellers in the market. In such a scenario, the marginal costs of production and consumption are fully accounted for in the market supply and demand curves, respectively. Therefore, the market supply represents all of the costs to society of producing the product, including the marginal costs of production.

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for a firm in a perfectly competitive industry group of answer choices the demand curve is unitary elastic throughout. the price elasticity of demand is zero.

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In a perfectly competitive industry, the demand curve is typically assumed to be horizontal or perfectly elastic. This means that the price elasticity of demand is infinite, indicating that consumers are highly responsive to changes in price.

However, in the scenario you presented where the demand curve is unitary elastic throughout, this means that the price elasticity of demand is exactly equal to 1. This indicates that consumers are still responsive to price changes, but the response is proportionate to the change in price. In terms of the firm's pricing strategy, it would need to be mindful of how changes in price will impact its market share within the group of competitors.
In a perfectly competitive industry, for a firm, the demand curve is characterized by having a price elasticity of demand equal to infinity (not zero or unitary elastic). This is because the firm is a price taker and faces a horizontal demand curve at the market-determined price. In other words, the firm can sell any quantity of its product at the given market price without affecting the price itself.

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Your firm is considering a project that will cost $4.548 million up front, generate cash flows of $3.50 million per year for 3 years, and then have a cleanup and shutdown cost of $6.00 million in the fourth year.
a.) How many IRRs does this project have?
b.) Calculate a modified IRR for this project assuming a discount and compounding rate of 10.0%.
c.) Using the MIRR and a cost o capital of 10.0%, would you take the project?

Answers

a) The project has multiple IRR because of the cash outflow in the fourth year. To find all possible IRRs, we need to solve for the roots of the equation:

-$4.548M + $3.5M/(1 + IRR)¹ + $3.5M/(1 + IRR)²+ $3.5M/(1 + IRR)³ + $6M/(1 + IRR)⁴= 0

Using a financial calculator or software, we find that this equation has three roots: 15.72%, -8.41%, and 4.36%. Therefore, the project has three IRRs.

b) To calculate the modified IRR (MIRR), we first need to find the future value (FV) of the cash inflows from years 1-3 and the outflow in year 4, discounted at the firm's cost of capital:

FV = $3.5M/(1 + 10%)¹ + $3.5M/(1 + 10%)² + $3.5M/(1 + 10%)³ - $6M/(1 + 10%)⁴ = $6.004M

Next, we need to find the rate of return that equates the future value of the inflows to the initial cost of the project, using a single discount rate:

-$4.548M + $6.004M/(1 + MIRR)³ = 0

Using a financial calculator or software, we solve for the MIRR as follows: MIRR = 12.85%

c) Since the MIRR (12.85%) is greater than the cost of capital (10%), we would accept the project. The MIRR represents the rate of return that takes into account the timing of the cash flows and assumes that all cash inflows are reinvested at the cost of capital, which makes it a better measure of the project's profitability than the IRR in this case.

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as social networks evolve, both marketers and the owners of social networking sites are realizing the opportunities such networks offer. as a result, marketers have begun investigating and experimenting using social networks for which marketing mix element?

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Promotion of Social networks is being used by marketers for various promotional activities such as advertising, influencer marketing, content marketing, and social media campaigns.

Promoting is the component of the marketing mix that marketers are researching and experimenting with utilising social networks. Social networks give marketers a platform to connect with and interact with their target audience through a variety of marketing initiatives. Social networks are used by marketers for influencer marketing, social media campaigns, content marketing, and advertising.

Social media platforms provide a range of tools and capabilities to assist marketers in efficiently creating and distributing their promotional messages. Marketers are taking advantage of social networking sites' rising popularity and usage to raise brand recognition, increase traffic to their websites, and boost sales.

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what's the decision making biases, evidence and ethical and grouo decision making?
whats the inputs and what caused this?
Should Colleges Expel Students whose Parents Cheated to Get Them In? The largest academic fraud scandal to date occurred in March 2018. Federal prosecutors charged 50 individuals with a variety of crimes, including money laundering. Wealthy television actresses, corporate executives, hedge fund managers, and others are said to have paid $25 million to college officials to secure slots for their children.

Answers

Decision making biases are systematic errors or deviations from rationality in the decision making process. Evidence-based decision making involves using the best available evidence to inform decision. Group decision making involves making decisions as a collective rather than as an individual. The college admissions scandal involved wealthy individuals bribing college officials to secure admission for their children.

Whether colleges should expel students whose parents cheated to get them in?

The academic fraud scandal of March 2018, where wealthy individuals paid money to college officials to secure admission for their children.

The inputs that caused this scandal are the unethical actions of wealthy parents who paid bribes to college officials, and the decision-making biases of college officials who were willing to accept these bribes and grant admission to unqualified students.

Decision making biases: Decision making biases are systematic errors or deviations from rationality in the decision making process. Examples include confirmation bias (the tendency to favor information that confirms one's preexisting beliefs), overconfidence bias (the tendency to overestimate one's own abilities and the accuracy of one's beliefs), and availability bias (the tendency to rely on easily available information rather than seeking out more complete or accurate information).Evidence and ethical decision making: Evidence-based decision making involves using the best available evidence to inform decisions, while ethical decision making involves considering the moral implications and consequences of decisions. Ideally, decisions should be both evidence-based and ethical, but sometimes there may be conflicts between these two factors.Group decision making: Group decision making involves making decisions as a collective rather than as an individual. This can have advantages such as increased diversity of perspectives and expertise, but it can also lead to challenges such as groupthink (the tendency to conform to the group's opinions rather than expressing dissenting views).Inputs and causes of the college admissions scandal: The college admissions scandal involved wealthy individuals bribing college officials to secure admission for their children. The inputs or factors that contributed to this scandal include the pressure and competition for admission to elite universities, the perceived importance of attending a prestigious university for social and career advancement, and the willingness of some individuals to use their wealth and connections to gain an unfair advantage. The causes of the scandal are likely multifaceted and complex, involving individual and systemic factors.Should colleges expel students whose parents cheated to get them in? This is a complex ethical question that may involve considerations such as the degree of involvement of the student in the cheating, the potential harm to other students who were denied admission due to the cheating, and the potential for redemption and rehabilitation. Ultimately, the decision may depend on the specific circumstances of each case and the values and principles of the institution.

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Given the following data: Stock price = $50; Exercise price = $45; Risk-free rate = 6%; variance = 0.2 ; Expiration = 3 months.
Calculate value of a European call option:(Use Black-Scholes Formula).
A) $7.62
B) $7.90
C) $5.00
D) none of the above

Answers

The value of the European call option is $7.90. The correct option is (B).

To calculate the value of a European call option using the Black-Scholes formula, we need to use the following equation:

C = SN(d1) - Xe[tex]{(-r*T)}[/tex]*N(d2)

Where:

C = Call option price

S = Stock price

X = Exercise price

r = Risk-free rate

T = Time to expiration (in years)

N() = Cumulative normal distribution function

d1 = [ln(S/X) + (r + σ[tex]{(2/2)}[/tex]T] / [σsqrt(T)]

d2 = d1 - σ*sqrt(T)

Plugging in the given values, we get:

T = 3/12 = 0.25 (since the expiration is 3 months)

d1 = [ln(50/45) + (0.06 + 0.2[tex](2/2)[/tex]0.25] / [0.2sqrt(0.25)] = 0.7293

d2 = 0.7293 - 0.2*sqrt(0.25) = 0.5293

N(d1) = 0.7661 (-0.06*0.25)

N(d2) = 0.7007

Using the equation, we get:

C = 500.7661 - 45e [tex]{ (-0.06*0.25)}[/tex] *0.7007 = $7.90

Therefore, the value of the European call option is $7.90.

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a machine is purchased on september 30, 2024, for $60,000. useful life is estimated at four years and no residual value is anticipated. the double-declining-balance depreciation method is used. depreciation expense for 2025 should be: multiple choice $15,000. $30,000. $26,250. all of the other answer choices are incorrect.

Answers

For a machine is purchased on September 30, 2024, for $60,000, Depreciation expense for 2025 is $15,000

The double-declining-balance depreciation method calculates depreciation expense as a percentage of the asset's book value, which decreases over time.

To calculate the annual depreciation expense using this method, we first need to calculate the straight-line depreciation rate, which is 1 / useful life. In this case, the straight-line depreciation rate is 1 / 4 = 0.25 or 25%.

The double-declining-balance depreciation rate is twice the straight-line depreciation rate, or 50%.

Using this method, the depreciation expense for 2025 would be:

Book value at the beginning of the year (2025) = $60,000 - depreciation expense for 2024 = $60,000 - (50% x $60,000) = $30,000

Depreciation expense for 2025 = Double-declining-balance depreciation rate x book value at the beginning of the year = 50% x $30,000 = $15,000

Therefore, the answer is $15,000.

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According to ecological theory, each organism has one place where it will be most successful, called the __________.A) fundamental niche B) microenvironment C) guild D) realized niche

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According to ecological theory, each organism has one place where it will be most successful, called the fundamental niche. According to ecological theory, each organism has one place where it will be most successful, called the fundamental niche.

The fundamental niche refers to the entire range of environmental conditions, such as temperature, humidity, and resource availability, in which a species can potentially survive and reproduce in the absence of biotic interactions such as competition, predation, or disease. In contrast, the realized niche refers to the actual range of environmental conditions and resources in which a species is able to survive and reproduce, taking into account the effects of biotic interactions with other species in the ecosystem. The realized niche is often narrower than the fundamental niche, due to competition and other biotic interactions that limit a species' ability to exploit all of the available resources and environmental conditions.

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According to ecological theory, each organism has one place where it will be most successful, called the fundamental niche. According to ecological theory, each organism has one place where it will be most successful, called the fundamental niche. So the correct option is A .

The fundamental niche refers to the entire range of environmental conditions, such as temperature, humidity, and resource availability, in which a species can potentially survive and reproduce in the absence of biotic interactions such as competition, predation, or disease. In contrast, the realized niche refers to the actual range of environmental conditions and resources in which a species is able to survive and reproduce, taking into account the effects of biotic interactions with other species in the ecosystem. The realized niche is often narrower than the fundamental niche, due to competition and other biotic interactions that limit a species' ability to exploit all of the available resources and environmental conditions.

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packard corporation reported pretax book income of $501,900. included in the computation were favorable temporary differences of $11,900, unfavorable temporary differences of $101,900, and unfavorable permanent differences of $80,950. the corporation's current income tax expense or benefit would be:

Answers

The corporation's current income tax expense or benefit would be A) $140,700 tax expense.

To find the corporation's current income tax expense or benefit, we need to consider the temporary differences and permanent differences that impact the taxable income.

First, let's adjust the pretax book income by considering the temporary differences:

- Favorable temporary differences: $10,000 (subtract)
- Unfavorable temporary differences: $100,000 (add)

Adjusted pretax book income: $500,000 - $10,000 + $100,000 = $590,000.

Now, let's adjust the adjusted pretax book income by considering the permanent differences:

- Unfavorable permanent differences: $80,000 (add)

Taxable income: $590,000 + $80,000 = $670,000.

Assuming a corporate tax rate of 21%, we can calculate the current income tax expense as follows:

Current income tax expense = Taxable income × Tax rate

Current income tax expense = $670,000 × 0.21 = $140,700

So, the corporation's current income tax expense is $140,700, which corresponds to option A) $140,700 tax expense.

The question was incomplete, Find the full content below:

Packard Corporation reported pretax book income of $500,000. Included in the computation were favorable temporary differences of $10,000, unfavorable temporary differences of $100,000, and unfavorable permanent differences of $80,000. The corporation's current income tax expense or benefit would be:

A) $140,700 tax expense.

B) $123,600 tax benefit.

C) $121,800 tax expense.

D) $105,000 tax benefit.

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peter rourke, a loan processor at wentworth bank, has been timed peforming four work elements, with the results shown in the following table. the allowances for tasks such as this are personal, 7%; fatigue 10%; and delay, 3%. a) what is the normal time? b) what is the standard time ...

Answers

The formula calculates the normal time to be 4.8 minutes.

The standard  time is 5.52 minutes.

a) The normal time can be calculated using the formula:

Normal time = (sum of individual times) x (1 + sum of allowances)

Normal time = (1.5 + 0.8 + 1.2 + 0.5) x (1 + 0.07 + 0.10 + 0.03)

Normal time = 4 x 1.20 = 4.8 minutes

b) The standard time can be calculated by adding a contingency allowance for potential delays and errors, which is typically set at 15% of the normal time. Therefore:

Standard time = normal time x (1 + contingency allowance)

Standard time = 4.8 x (1 + 0.15)

Standard time = 4.8 x 1.15

Standard time = 5.52 minutes

The normal time for Peter Rourke to perform the work elements is 4.8 minutes, and the standard time is 5.52 minutes after accounting for contingency allowance. The allowances of personal, fatigue, and delay are included to factor in the variation in individual performance due to factors such as personal factors, fatigue, and delays. By accounting for these factors, the organization can better estimate the actual time required to perform the task and plan accordingly.

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A business owner wishes to calculate the return on two of its equipment purchases X and Y. The equipment X was purchased one year ago for $20,000 and currently has a market value of $18,500. During the year, it generated $1,000 of after-tax cash receipts. The equipment Y was purchased 2 years ago its value in the year just completed declined from $18,000 to $14,000. During the year, it generated $3,000 of after tax cash receipts. Calculate the annual rate of return, k, for each of these machines

Answers

Equipment X has an annual rate of return of -2.5%, while equipment Y has a rate of return of -5.56%.

To calculate the annual rate of return (k) for equipment X and Y, you can use the formula:

k = (Ending Value - Beginning Value + Cash Receipts) / Beginning Value

For equipment X:
Beginning Value = $20,000
Ending Value = $18,500
Cash Receipts = $1,000

k (X) = ($18,500 - $20,000 + $1,000) / $20,000
k (X) = -$500 / $20,000
k (X) = -0.025 or -2.5%

For equipment Y:
Beginning Value = $18,000
Ending Value = $14,000
Cash Receipts = $3,000

k (Y) = ($14,000 - $18,000 + $3,000) / $18,000
k (Y) = -$1,000 / $18,000
k (Y) = -0.0556 or -5.56%

The annual rate of return for equipment X is -2.5%, and for equipment Y is -5.56%.

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in the long run, a firm's blank______ and those of its distributors set a baseline for a product's price, allowing the firm to both survive and get its product to consumers.

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In the long run, a firm's production costs and those of its distributors set a baseline for a product's price, allowing the firm to both survive and get its product to consumers.

What do you mean by product price?

The practice of estimating a product's quantitative value based on both internal and external elements is known as product pricing. The performance of your business as a whole, including cash flow, profit margins, and customer demand, is directly impacted by product pricing.

Who are called consumers?

Consumers include any individual or group of individuals who purchase goods or use services solely for personal use rather than for resale or production. In the sales distribution network, they act as the final consumers. People who use goods and services to fulfill their needs are called consumers.

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Cantoon Co. is considering the acquisition of a unit from the French government. Its initial outlay would be $4 million. It will reinvest all the earnings in the unit. It expects that at the end of seven years, it will sell the unit for 12 million euros after capital gains taxes are paid. The spot rate of the euro is $1.10 and is used as the forecast of the euro in the future years. Cantoon has no plans to hedge Its exposure to exchange rate risk. The annualized U.S. risk-free interest rate is 4 percent regardless of the maturity of the debt, and the annualized risk-free Interest rate on euros is 6 percent, regardless of the maturity of the debt. Assume that interest rate parity exists. The Cantoon's cost of capital is 22 percent. It plans to use cash to make the acquisition.
a. Determine the NPV under these conditions. Do not round intermediate calculations. Round your answer to the nearest dollar. Negative values, if any, should be indicated by a minus sign.
b. Rather than use all cash, Cantoon could partially finance the acquisition. It could obtain a loan of 3.5 million euros today that would be used to cover a portion of the acquisition. In this case, it would have to pay a lump-sum total of 8 million euros at the end of seven years to repay the loan. There are no interest payments on this debt. This financing deal is structured such that none of the payments is tax-deductible. Determine the NPV if Cantoon uses the forward rate instead of the spot rate to forecast the future spot rate of the euro and elects to partially finance the acquisition. You need to derive the seven-year forward rate for this question. Do not round intermediate calculations. Round your answer to the nearest dollar. Negative values, if any, should be indicated by a minus sign.

Answers

Therefore, the NPV of the investment under these conditions is $6,146,155.56.

a. The NPV under these conditions, we need to calculate the present value of the expected cash flows from the investment.

The initial outlay is $4 million. We need to convert the expected future cash flows from euros to dollars using the spot rate of $1.10 per euro. The expected future cash flows are:

End of year 1: 0 euros

End of year 2: 0 euros

End of year 3: 0 euros

End of year 4: 0 euros

End of year 5: 0 euros

End of year 6: 0 euros

End of year 7: 12 million euros

We also need to adjust for the interest rate differential between the U.S. and the eurozone, which is given by interest rate parity. According to interest rate parity, the forward rate of the euro in 7 years will be:

Forward rate = Spot rate * (1 + euro interest rate) / (1 + U.S. interest rate)

Forward rate = 1.10 * (1 + 0.06) / (1 + 0.04)^7

Forward rate = 1.3166

Therefore, the expected future cash flows in dollars are:

End of year 1: 0 dollars

End of year 2: 0 dollars

End of year 3: 0 dollars

End of year 4: 0 dollars

End of year 5: 0 dollars

End of year 6: 0 dollars

End of year 7: 15.7992 million dollars (12 million euros * 1.3166)

We can now calculate the present value of the expected cash flows using a discount rate of 22 percent, which is the cost of capital for Cantoon:

PV = -4,000,000 + (15,799,200 / (1 + 0.22)^7)

PV = $6,146,155.56

Therefore, the NPV of the investment under these conditions is $6,146,155.56.

b. If Cantoon uses the forward rate instead of the spot rate to forecast the future spot rate of the euro and elects to partially finance the acquisition, we need to derive the seven-year forward rate. The forward rate is given by:

Forward rate = Spot rate * (1 + euro interest rate) / (1 + U.S. interest rate)

Forward rate = 1.10 * (1 + 0.06) / (1 + 0.04)^7

Forward rate = 1.3166

This will cost Cantoon:

Cost in dollars = 8 million euros / 1.3166 = $6,077,734.82

The expected future cash flows in dollars are now:

End of year 1: -3,850,000 dollars

End of year 2: 0 dollars

End of year 3: 0 dollars

End of year 4: 0 dollars

End of year 5: 0 dollars

End of year 6: 0 dollars

End of year 7: 6,077,734.82 dollars

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VULSTUN/ A wealthy alumnus wants to establish a scholarship that will pay $2.000 at the beginning of every school year. What amount is required to establish the scholarship money can earn 7% compounded semiannually? $57,142.86 356,160.06 $30,080.03 O $59.142.86 $28.571.43

Answers

$356,160.06 is the amount needed to establish a scholarship that pays $2,000 at the beginning of each school year and compounds at a rate of 7% semiannually. Option B is correct.

The amount required to establish the scholarship can be calculated using the formula for present value of an annuity:

PV = [tex]\frac{PMT}{i} \cdot \left(1 - \frac{1}{(1+i)^n}\right)[/tex]

Where PV is the present value, PMT is the payment per period, i is the interest rate per period, and n is the number of periods.

In this case, PMT = $2,000, i = 0.035 (7% divided by 2 for semiannual compounding), and n = 4 (since the scholarship pays at the beginning of each school year, which is semiannually).

Plugging these values into the formula, we get:

PV = [tex]\left(\frac{2{,}000}{0.035}\right)\left(1 - \frac{1}{\left(1+0.035\right)^4}\right)[/tex]

PV = $356,160.06

Therefore, the amount required to establish the scholarship is $356,160.06. Option B is correct.

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Sam has a housing loan with the bank before the COVID19 pandemic broke out. The details of the loan are as follows:
Principal: $1,000,000
Interest Rate: 4% per annum
Tenure: 25 years
Repayment: Amortization with monthly repayment.
The lives of many were affected with jobs lost and businesses declining by the pandemic. Sam was adversely affected, too, and was unable to service his loan. Many banks, showed compassion by allowing homeowners to defer full loan repayments by paying interest only for 18 months as a relief. When this was announced, Sam had just paid the 120th instalment of his housing loan.
a) Compute the monthly repayment before the pandemic broke out?
b) Compute how much Sam has to pay each month during the relief period?
c) Compute how much Sam is still owing the bank at the end of the relief period?
d) Compute the monthly repayment when the loan repayment resumes if he still plans to
discharge the loan fully at the end of the 25th year?
e) Compute how many more months he needs to extend the loan from the original 25 years if the monthly repayment in part (a) above is maintained when the repayment resumes?
Show your workings and also justify your answer intuitively.
f) Upon repayment resumption, what if Sam wishes to maintain the same repayment in part (a) and still discharging the loan at the end of 25th year, compute how much the
final balloon payment should be at that time?

Answers

Sam has a housing loan with the bank before the COVID19 pandemic broke out. The details of the loan are as follows:

Principal: $1,000,000

Interest Rate: 4% per annum

Tenure: 25 years

Repayment: Amortization with monthly repayment.

The lives of many were affected with jobs lost and businesses declining by the pandemic. Sam was adversely affected, too, and was unable to service his loan.

Many banks, showed compassion by allowing homeowners to defer full loan repayments by paying interest only for 18 months as a relief. When this was announced, Sam had just paid the 120th installment of his housing loan.

a) Compute the monthly repayment before the pandemic broke out?

b) Compute how much Sam has to pay each month during the relief period?

c) Compute how much Sam is still owing the bank at the end of the relief period?

d) Compute the monthly repayment when the loan repayment resumes if he still plans to

discharge the loan fully at the end of the 25th year?

e) Compute how many more months he needs to extend the loan from the original 25 years if the monthly repayment in part (a) above is maintained when the repayment resumes?

Show your workings and also justify your answer intuitively.

f) Upon repayment resumption, what if Sam wishes to maintain the same repayment in part (a) and still discharging the loan at the end of 25th year, compute how much the

final balloon payment should be at that time?

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A corporation may wish to repurchase some of its shares in the market for all the following reasons except:
this action might maximize after-tax benefit to shareholders.
it can stabilize or increase the market price of the stock.
the stock may be needed for an employee compensation plan.
corporations may have strategic goals for the organization that may be adversely

Answers

Repurchasing shares of a corporation’s stock is a common practice used by companies to increase the value of the stock and to increase shareholder value.

It can also be used to stabilize the stock's market price, or to provide shares for employee compensation plans. However, companies do not typically repurchase shares with the intention of maximizing the after-tax benefit to shareholders.

After-tax benefits refer to the amount of money that a company or individual has left after taxes, and repurchasing shares does not directly affect these benefits.

Instead, a company might choose to repurchase shares if it has strategic goals for the organization, such as increasing the company's ownership stake, increasing the stock's market value, or rewarding employees. Repurchasing shares is not an action taken to maximize after-tax benefit to shareholders, but rather an action to increase the market value or to meet organizational goals.

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12-1 required investment tannen industries is considering an expansion. the necessary equipment would be purchased for $18 million and will be fully depreciated at the time of purchase, and the expansion would require an additional $2 million investment in net operating working capital. the tax rate is 25%. a. what is the initial investment outlay after bonus depreciation is considered? b. the company spent and expensed $20,000 on research related to the project last year. would this change your answer? explain. c. suppose the company plans to use a building that it owns to house the project. the building could be sold for $1 million after taxes and real estate commissions. how would that fact affect your answer?

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a. The initial investment outlay after bonus depreciation is considered would be calculated as follows:

Equipment cost: $18 million
Bonus depreciation (assuming 50%): ($9 million)
Net equipment cost: $9 million
Net operating working capital: $2 million
Total initial investment outlay: $11 million

b. The $20,000 spent on research related to the project last year would not change the initial investment outlay. Research expenses are considered "sunk costs" and are not included in the calculation of the initial investment outlay.

c. If the company plans to use a building it owns to house the project and could sell it for $1 million after taxes and real estate commissions, this would increase the initial investment outlay by $1 million. The company would need to consider the opportunity cost of not selling the building and using it for the project instead. However, if the building is crucial to the success of the project, the company may decide to use it for the project instead of selling it.

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companies that pay extra attention to the impact of sensations on product experiences are engaged in:

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Companies that pay extra attention to the impact of sensations on product experiences are engaged in sensory marketing.

Sensory marketing is a marketing approach that focuses on the impact of sensations on consumer behavior and product experiences. It involves the use of sensory stimuli such as colors, textures, scents, sounds, and tastes to create a unique and memorable experience for the consumer.

The goal of sensory marketing is to create a positive emotional connection between the consumer and the brand or product. By appealing to multiple senses, companies can create a more immersive and engaging experience that can increase customer loyalty and drive sales.

Examples of sensory marketing include the use of ambient scents in stores, the sound of a car door closing to convey quality, and the use of specific colors and textures in product design.

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Assume Leroy contributes $200 per month to a retirement plan for 5 years. Then, Leroy will be able to increase his contribution to $300 per month for another 8 years. Given a 3 percent interest rate, what is the value of Leroy's retirement plan after 13 years? $67.369.98 $50.400.00 $44,565.60 $59.770.45

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The final value of Leroy's retirement plan after 13 years is $67,771.98

To calculate the value of Leroy's retirement plan after 13 years, we can use the formula for future value of an annuity. First, we can find the future value of Leroy's contributions of $200 per month for 5 years at a 3 percent interest rate.

Using a financial calculator, this comes out to be $13,009.27. Then, we can find the future value of his increased contributions of $300 per month for another 8 years at the same interest rate. This comes out to be $43,360.18. Adding these two values together gives us a total future value of $56,369.45.

However, we also need to add the interest earned on these contributions for the remaining 13th year. Using the same interest rate, this comes out to be an additional $11,401.53. Therefore, the final value of Leroy's retirement plan after 13 years is $67,771.98. The closest answer option to this is $67,369.98.

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what person argued a spatial approach where the commodification of nature stretches and deepens to penetrate new markets?

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David Harvey argued for a spatial approach where the commodification of nature stretches and deepens to penetrate new markets.

David Harvey, a Marxist geographer, argued that capitalism continuously expands by commodifying nature and creating new markets. He proposed a spatial approach that examines how this process occurs across different regions and how it affects social and environmental inequalities.

According to Harvey, the commodification of nature is not a neutral process, but one that is shaped by power relations and politics. This approach emphasizes the importance of understanding the spatial dynamics of capitalist development and its effects on ecological systems and human well-being.

Harvey's work has influenced critical environmental and political ecology research and has highlighted the need for a more integrated and intersectional understanding of environmental problems.

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Suppose that your Dallas-based company does business in the USA and Germany, so your firm carries bank deposits in both dollars and euros. You observe that in Germany, the nominal interest rate is 6% and expected inflation is 5%. In the USA, the comparable nominal interest rate is 4% and expected inflation is 2%. The spot rate for the euro is $1.21 and the one-year forward rate is $1.17.
a. (6 points) If purchasing power parity (PPP) hold, what is the expected spot rate of the euro in one year?
b. (6 points) If interest rate parity (IRP), what should the forward rate be?
c. (6 points) Based on your response to part b and the forward rate you observe in the market, does interest rate parity (IRP) hold? Briefly explain.

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a. If PPP holds, the expected spot rate of the euro in one year should be $1.2233 (1.21 x 1.03/1.05).

b. If IRP holds, the forward rate should be $1.1944 (1.21 x 1.04/1.06).

c. Based on the response to part b and the forward rate observed in the market, IRP does not hold.

This is because the observed forward rate of $1.17 is lower than the calculated forward rate of $1.1944, indicating that the market expects the euro to depreciate more than predicted by IRP. This could be due to factors such as market sentiment, political risk, or differences in liquidity between the two currencies.

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In relation to the term structure of interest rates, the expectations theory assumes:
a.
long-term rates paid bonds will be equal to the average of short-term interest rates expected to prevail over the longer term period.
b.
investors need to take into account costly transactions as they change their expectations.
c.
there is some impediment to market rates moving to equilibrium.
d.
there are a large number of financial investors who hold heterogeneous expectation about future interest rates.

Answers

The expectations theory of the term structure of interest rates assumes that long-term rates paid on bonds will be equal to the average of short-term interest rates expected to prevail over the longer term period. The correct answer is a.

In other words, the theory suggests that the shape of the yield curve depends on the market's expectations of future short-term interest rates. If investors expect short-term rates to rise in the future, long-term rates will also be higher to compensate for the increased risk.

Conversely, if investors expect short-term rates to fall, long-term rates will be lower.

The other answer options are not accurate representations of the expectations theory.

Option b mentions transactions costs, which are not directly related to the theory.

Option c suggests that there is an impediment to market rates moving to equilibrium, which is not a key assumption of the theory.

Option d mentions heterogeneous expectations, which are not necessarily required for the theory to hold.

The correct answer is a.

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which of the following is not a step in the capital budgeting decision? question 3 options: corrective action formulating a proposal evaluating the data post audit making a decision to minimize the greatest future benefit

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The step "making a decision to minimize the greatest future benefit" is not a part of the capital budgeting decision. The correct option is E.

The objective of capital budgeting is to identify the investment opportunities that can maximize the value of the firm. The steps involved in the capital budgeting decision process typically include identifying potential projects, estimating cash flows, evaluating the risks associated with each project, selecting projects that meet the investment criteria, and monitoring and reviewing the performance of the selected projects.

Corrective action, formulating a proposal, evaluating the data, and post-audit are all important steps in the capital budgeting decision process. Therefore, the correct option is E.

which of the following is not a step in the capital budgeting decision?

A. corrective action

B. formulating a proposal

C. evaluating the data

D. post audit

E. making a decision to minimize the greatest future benefit

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the occupational safety and health administration (osha) has determined that the probability of a worker dying from exposure to a hazardous chemical used in the production of fertilizer is 0.016. the cost of imposing a regulation that would ban the chemical is $32 million. if the value of a human life is equal to $5 million, how many people must the policy affect in order for the benefits to exceed the costs?

Answers

OSHA can use cost-benefit analysis to determine whether it is worthwhile to impose a regulation to ban a hazardous chemical. In this scenario, OSHA determined that the probability of a worker dying from exposure to the chemical is 0.016, and the cost of imposing a regulation to ban the chemical is $32 million.

To determine whether this regulation is worthwhile, OSHA can use cost-benefit analysis. This involves comparing the benefits of the regulation (i.e., the value of the lives saved) to the costs of implementing the regulation (i.e., the cost of banning the chemical).

The value of a human life is often used as a benchmark in cost-benefit analysis. In this scenario, the value of a human life is equal to $5 million. Therefore, to determine the benefits of the regulation, we need to calculate the value of the lives saved by banning the hazardous chemical.

To do this, we can multiply the number of workers who may be saved by the regulation by the value of a human life. In this scenario, if 1.6 workers may die for every 100 workers exposed to the chemical, and the regulation would ban the chemical for all workers, then the number of workers who may be saved is:

Number of workers who may be saved = 0.016 x Total number of workers

To determine the total number of workers, we need to know the number of workers who are exposed to the chemical. Let's assume that there are 10,000 workers who are exposed to the chemical. Then the number of workers who may be saved is:

Number of workers who may be saved = 0.016 x 10,000 = 160

To determine the benefits of the regulation, we can multiply the number of workers who may be saved by the value of a human life:

Benefits of the regulation = Number of workers who may be saved x Value of a human life

Benefits of the regulation = 160 x $5 million

Benefits of the regulation = $800 million

Therefore, the benefits of the regulation (i.e., the value of the lives saved) would be $800 million.

To determine whether the benefits of the regulation exceed the costs, we need to compare the benefits ($800 million) to the costs ($32 million):

Benefits of the regulation > Costs of the regulation

$800 million > $32 million

Since the benefits of the regulation exceed the costs, it would be worthwhile for OSHA to impose the regulation to ban the hazardous chemical

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the marketing activities that a company conducts to promote and execute its sponsorship are called . a. activation b. roi c. goodwill d. in-kind

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Activation is the term that refers to the marketing activities a company conducts to promote and execute its sponsorship. These activities are designed to engage the target audience, increase brand visibility, and achieve specific marketing objectives, ultimately leading to a higher ROI and fostering goodwill among the audience. OPTION A

The marketing activities that a company conducts to promote and execute its sponsorship are called "activation." Activation refers to the process of leveraging a sponsorship to engage with the target audience, create brand awareness, and achieve the company's marketing objectives. In a sponsorship activation, the sponsoring company implements various marketing strategies, such as events, promotional campaigns, and social media initiatives, to increase its brand visibility and create a positive association with the sponsored entity. This can include giveaways, exclusive content, special offers, or interactive experiences, among other tactics. These activities aim to engage the audience, enhance the customer experience, and drive tangible results, such as increased sales or leads. Activation is an essential component of a successful sponsorship strategy, as it ensures that the investment made in a sponsorship agreement translates into measurable returns for the company. By effectively activating a sponsorship, a company can improve its return on investment (ROI) and build goodwill with its target audience. In-kind sponsorships, which involve the provision of products or services instead of monetary support, can also be activated to achieve similar results.

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when using classical variable sampling, the audit team can reduce the variability of the population and ensure the selection of individual items by using the process of

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When using classical variable sampling, the audit team can reduce the variability of the population and ensure the selection of individual items by using the process of: stratification.

Stratification involves dividing the population into distinct subgroups or strata based on certain characteristics or criteria, such as dollar amounts or transaction types. This process helps in achieving a more representative sample and reduces the sampling risk.

1. Identify the criteria or characteristics for dividing the population into subgroups.


2. Create subgroups or strata based on the chosen criteria, ensuring that each item in the population belongs to one and only one stratum.


3. Determine the appropriate sample size for each stratum based on the desired level of confidence and tolerable error.


4. Select a random sample of items from each stratum using a sampling method such as simple random sampling or systematic sampling.


5. Evaluate the selected items and draw conclusions about the population based on the findings within each stratum.

By employing stratification in classical variable sampling, the audit team can achieve a higher level of precision and reliability in their conclusions about the population. This method allows for better control over sampling risk, more accurate estimation of population parameters, and greater assurance in the audit process.

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DHL company has issued 2 million ordinary shares and 1 million cumulative preference shares. The preference shares pay a fixed dividend of $5 per share. In 2019 the company made a loss and did not pay any dividends. In 2020 they returned to profitability and declared that there was a total of $25 million available to be paid as dividends. What will the ordinary dividend be in 2016?

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DHL company has issued 2 million ordinary shares and 1 million cumulative preference shares. The preference shares pay a fixed dividend of $5 per share. In 2019 the company made a loss and did not pay any dividends. In 2020 they returned to profitability and declared that there was a total of $25 million available to be paid as dividends.

Based on the information provided, here's the step-by-step calculation for the ordinary dividend in 2020:

1. Calculate the total dividends for cumulative preference shares:
  1 million cumulative preference shares * $5 per share = $5 million

2. Since the company made a loss in 2019 and did not pay dividends, the cumulative preference shareholders need to be compensated for 2019 as well:
  $5 million (for 2020) + $5 million (for 2019) = $10 million

3. Subtract the total cumulative preference dividends from the available $25 million:
  $25 million - $10 million = $15 million

4. Now, calculate the ordinary dividend per share:
  $15 million (remaining for ordinary shareholders) / 2 million ordinary shares = $7.50 per share

So, the ordinary dividend per share in 2020 will be $7.50.

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a firm's wacc: group of answer choices is the proper discount rate for every project the firm undertakes is used to value all of the firm's existing projects is a benchmark discount rate that may be adjusted for the riskiness of each project is for informational value only and should never be used as a discount rate

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A firm's WACC is a benchmark discount rate that may be adjusted for the riskiness of each project.

WACC (Weighted Average Cost of Capital) is the average cost of all the capital sources that a company uses to fund its operations, such as debt and equity. It is often used as a benchmark discount rate to evaluate the feasibility of new projects.

However, since the risk levels of different projects may vary, the WACC can be adjusted for the riskiness of each project. Therefore, WACC is a useful tool for companies to determine if a new project will generate sufficient returns to cover its cost of capital and create value for shareholders.

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you flip a coin three times and observe whether a head or a tail occurs on each flip. the number of outcomes in the sample space for this random phenomenon is:

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you flip a coin three times and observe whether a head or a tail occurs on each flip. the number of outcomes in the sample space for this random phenomenon is 3.

A mathematical method for determining the likelihood of an event occurring is probability. An experiment or activity that involves, for example, tossing a coin, rolling a die, or selecting a card from a deck produces an event.

When comparing the number of choices (such as rolling a two on a die) to the total number of outcomes (six in the case of a die), the probability is determined. Events are the results of a random experiment. The proportion of favorable outcomes to possible outcomes determines a compound event's probability.

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