Consider a single period problem where the riskless interest rate is zero, and there are no taxes. A firm consists of a machine that will produce cash flows of $210 if the economy is good and $80 if the economy is bad. The good and bad states occur with equal probability and the covariance of these states with the market portfolio is zero (no systematic risk). Initially, the firm has 100 shares outstanding and debt with a face value of $50 due at the end of the period. What is the share price of the firm

Answers

Answer 1

Assuming the firm has 100 shares outstanding and debt with a face value of $50 due at the end of the period. The share price of the firm is $0.95.

Share price

First step is to calculate the expected payoff to equity

Expected equity=[($80 ×0.5) + ($210 × 0.5)]-$50

Expected equity=($40+$105)-$50

Expected equity = $145-$50

Expected equity=$95

Now let calculate the share price

Share price=$96/100 shares

Share price=$0.95

Inconclusion the share price of the firm is $0.95.

Learn more about share price here:https://brainly.com/question/1166179


Related Questions

The accountant for TI Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available:

Retained earnings balance at the beginning of the year $166,000
Cash dividends declared for the year 52,000
Net income for the year 99,500.

What is the ending balance for retained earnings?

Answers

Answer:

$213,500.

Explanation:

Retained earnings balance at the beginning of the year $ 166,000

- Cash dividends declared for the year   52,000

+ Net income for the year   99,500

Two companies are having a dispute over a broken real estate
contract. They argue the dispute in front of a neutral third
party, who makes a ruling in favor of one side. This is an
example of _____
O A. mediation
B. negotiation
C. arbitration
D. conciliation

Answers

Answer:

C. Arbitration

Explanation:

It heans to have an independent unbiased person settle a dispute

The two companies have a dispute over a broken real estate contract. They argue the dispute in front of a neutral third party, who makes a ruling in favor of one side. This is an example of arbitration. Thus option (C) is correct.

What is arbitration?

Arbitration is a method of dispute resolution in which parties to a dispute agree to have their case heard and decided by one or more independent arbitrators, rather than by a court of law.

In arbitration, the arbitrators listen to evidence presented by both sides and make a binding decision based on the facts and the applicable law. Arbitration can be used to resolve a wide range of disputes, including commercial disputes between businesses, disputes between employers and employees, and disputes between individuals.

When the dispute of two companies  is resolved by neutral third party is an example of arbitration. Therefore, option (C) is correct.

Learn more about arbitration here:

https://brainly.com/question/15887242

#SPJ7

"Davcher, Inc. is considering a project for next year, which will cost $5 million. Davcher plans to use the following combination of debt and equity to finance the investment. Issue $1.5 million of 10-year bonds at a price of 101, with a coupon/contract rate of 4%, and flotation costs of 2% of par. Use $3.5 million of funds generated from retained earnings. The equity market is expected to earn 8%. U.S. Treasury bonds are currently yielding 3%. The beta coefficient for Davcher, Inc. is estimated to be .70. Davcher is subject to an effective corporate income tax rate of 30 percent. (8 points) " Compute Davcher's expected rate of return using the Capital Asset Pricing Model (CAPM).

Answers

Based on the U.S. Treasury bond rate, the market return and the beta, Davcher's expected rate of return would be 6.5%.

What is the expected rate of return?

Using the Capital Asset Pricing Model (CAPM), the expected rate of return would be:

= Risk free rate + Beta x Market premium

Market premium:

= Market return - risk free rate

= 8% - 3% rate of treasury bonds

= 5%

Expected rate of return is:

= 3% + 0.70 x 5%

= 6.5%

Find out more on the Capital Asset Pricing Model at https://brainly.com/question/15851284.

What is the difference between carriage forward and carriage paid?

Answers

Answer: carriage forward means delivery is being laid by the buyer. Carriage paid means delivery is paid by the seller.

When you shop online, most retailers collect personal information about you.
Group of answer choices

True

False

Answers

The answer is false this question is false

Assume that the pricing manager discovered that more seats went unsold for tuesday night games than for any other night of the week, indicating a lower demand for soccer tickets on tuesdays. The la galaxy could lower the ticket price for future tuesday night games to avoid:.

Answers

The la galaxy could lower the ticket price for future tuesday night games to avoid idle production capacity.

What is idle production capacity?

Idle production capacity occurs when the supply of an item exceeds its demand. As a result, there would be a surplus of supply and some of the products would not be utilised by consumers.

To reduce idle production capacity, prices can be reduced. This is because price is inversely related to quantiy demanded.

To learn more about surplus, please check: https://brainly.com/question/12110173

Why is it important for a company to pay attention to its
supply chain when practicing CSR?
O A. The company needs to ask its suppliers to help
advertise for the company.
O B. The company needs to request the EPA's approval
for all of its suppliers.
O C. The company needs to make sure its suppliers are
providing products at the lowest cost.
O D. The company needs to make sure its suppliers are
treating the planet with respect.

Answers

The company needs to make sure its suppliers are providing products at the lowest cost reason it is important for a company to pay attention to its supply chain when practicing CSR.

What is CSR?

Corporate social responsibility CSR is a concept where a business engages in activities that makes it accountable to a wide range of stakeholders.

Corporate social responsibly make businesses corporate citizens. A business shares some of its profits with society by funding projects and programs that benefit the community.

Hence, the company needs to make sure its suppliers are providing products at the lowest cost reason it is important for a company to pay attention to its supply chain when practicing CSR.

Learn more about CSR here : https://brainly.com/question/14624782

Vinodh Wants to access his credit report. he can get his credit report from three different agencies. which is NOT one of the credit reporting agencies?

Answers

Answer:

The answer is A-Monetarion

Explanation:

I just took the test:)

Monetarion is not one of the credit reporting agencies where Vinohd can get his credit report.

Who are the credit reporting agencies?

These are businesses that specializes in the maintainance of historical credit information on individuals and businesses.

In the list given, the company named "Monetarion" is not one of the credit reporting agencies where Vinohd can get his credit report.

Therefore, the Option A is correct.

Read more about credit reporting agencies

brainly.com/question/9913263

#SPJ2

Define “supply” for commodity

Answers

Answer:

The supply of a commodity is the amount of the commodity which the sellers or producers are able and willing to offer for sale at a particular price, during a certain period of time.

Note: Hope it helped

The amount of a commodity that sellers or producers are able and willing to provide for sale at a specific price for a specific length of time is referred to as the supply of that commodity.

To put it another way, we may say that supply is a relative concept. It is always used in the context of a relationship between price and time. A statement of supply that makes no mention of price or time makes little sense from an economic standpoint. Consider the following: "The supply of milk is 1,000 litres." In economic analysis, this statement has no relevance whatsoever.

I hope this helps you
:)

Employers pay ___ ___ ___ ___ (__) to the unemployment insurance system

Answers

Answer: employers: The UI program is financed by employers who pay unemployment taxes on up to $7,000 in wages paid to each worker. The actual tax rate varies for each employer, depending in part on the amount of UI benefits paid to former employees. Thus, the UI tax works much like any other insurance premium.

Explanation:

hope this helped ya :)

“Wealth Management Crisis aat UBS” (see file attached)
Questions:
1.In your opinion, to what extent did the government and national culture play in the scandal? And to what extent did corporate culture contribute to the scandal?
2.Without the Global Financial Crisis, do you think the scandal would have been reasonably uncovered, or would they have lingered? If yes/no, please explain.
3.Does it matter who or what entities could have been impacted by the scandal? What if net/net there were no losses incurred?
4.In your opinion, is the next scandal already underway, and are we just waiting for the next recession to find out what is currently going on? Please explain.

Answers

1. Based on the “Wealth Management Crisis at UBS,” my opinion is that the government and national culture of Switzerland, the U.S. Treasury, and some corrupt governments around the world, played a major role in aiding the tax fraud scandal committed by more than 52,000 U.S. residents.

The extent to which the corporate culture of UBS also contributed to the scandal is that the bank continued to help these U.S. residents to hide billions of dollars in untaxed assets.  Why should the bank deliberately hide accounts for U.S. residents?

2. The global financial crisis between 2007 and 2009 helped in uncovering the secret accounts and tax fraud scandal because its challenges encouraged the U.S. Department of Justice (DOJ) decided to investigate the tax frauds committed by foreign account holders.

The implication is that without the global financial crisis, the investigations that uncovered the tax fraud would not have been initiated by the U.S. Department of Justice (DOJ) soon.

3. It matters to the entities that could have been impacted by the scandal.  For instance, the U.S. Treasury was being deprived of hundreds of millions of dollars in taxes, according to the report.

Without the bailment from the Swiss government, UBS would have collapsed.  Many account holders would have lost their savings in the process.

There is no way no losses would not have been incurred if the scandal continued.

4. Importantly, we are not supposed to wait for the next global recession to uncover similar financial scandals and tax frauds around the world.

Thus, tax havens, like the UBS, must come under rigorous investigations from time to time.  Such regular investigations would deter would-be tax fraudsters and assets looters from committing to hiding their accounts.

Learn more about asset looting and Wealth Management crises at https://brainly.com/question/24554162 and https://brainly.com/question/25664180

!!50 Points answer quickly!!

Answers

Answer:

i think it's

jesse

jesse

jesse

Explanation:

Explain how we derive the supply curve for an individual firm

Answers

The market supply curve is calculated by adding the quantity of goods sold at a particular price across all market participants (suppliers). It illustrates the price-quantity relationships available to consumers of the commodity or service.

I hope this helps you :)

Palm, which uses the high-low method, had an average cost per unit of $40 at its lowest level of activity when sales equaled 1,600 units and an average cost per unit of $31.00 at its highest level of activity when sales equaled 3,200 units. Palm would estimate fixed costs as:

Answers

Using the high-low method of calculating costs, Palm will estimate the fixed cost element as $28,800.

Calculation of Fixed Cost Using the High-Low Method

The fixed cost can be estimated as follows:

1) Calculation of variable cost elements

Total cost at a particular level of activity = Average cost per unit * units ………………… (1)

Using equation (1), we have:

Total cost at the lowest level of activity = $40 * 1,600 = $64,000

Total cost at the highest level of activity = $31 * 3,200 = $99,200

Variable cost per unit = (Total cost at the lowest level of activity - Total cost at the lowest level of activity) / (Highest Units - Lowest Units) = ($99,200 - $64,000) / (3,200 - 1,600) = $35,200 / 1,600 = $22

Therefore, the variable cost element is $22 per unit.

2) Calculation of fixed cost elements

Total cost = Total Fixed Cost + Total Variable Cost ................. (2)

Where;

Total Variable Cost = Variable cost unit * Units at a particular Total Cost

Using the highest unit with its total cost and substituting into equation (2), we have:

$99,200 = Total Fixed Cost + ($22 * 3,200)

$99,200 = Total Fixed Cost + $70,400

Total Fixed Cost = $99,200 - $70,400

Total Fixed Cost = $28,800

Therefore, Palm will estimate the fixed cost element as $28,800.

Learn more about the high-low method at: https://brainly.com/question/26247896.

True or False: Cutting advertising expenses often causes an erosion of profit

Answers

Answer:

So True

Explanation:

The Consumer Price Index (CPI)
is the tool used to measure
inflation. It is calculated
through which of the following
methods?
A. Door-to-door surveys
B. Online Questionnare
C. Census

Answers

both A and C are correct, though more of the CPI’s data comes from A.

In 2021, Carson is claimed as a dependent on his parents' tax return. His parents report taxable income of $200,000 (married filing jointly). Carson's parents provided most of his support. What is Carson's tax liability for the year in each of the following alternative circumstances? Use Tax Rate Schedule, Dividends and Capital Gains Tax Rates for reference. b. Carson is 23 years old at year-end. He is a full-time student and earned $14,000 from his summer internship and part-time job. He also received $5,000 of qualified dividend income.

Answers

Carson's tax liability for 2021 as a 23-year full-time student, who earns from the summer internship and part-time job and receives a qualified dividend is $645.

What is tax liability?

Tax liability refers to the amount that a taxpayer is obliged to pay.

The tax liability is a function of the taxpayer's taxable income, tax bracket, deductions, and applicable tax rate.

In this case, we have assumed a flat tax rate of 10% for both Carlson's earned income and the dividend income.

Data and Calculations:

Earned income = $14,000

Qualified Dividend income = $5,000

Adjusted taxable income = $6,450 ($19,000 - $12,550)

Tax liability = $645 ($6,450 x 10%)

Thus, Carson's tax liability for 2021 is $645.

Learn more about tax liabilities at https://brainly.com/question/7409145

Jordan needs to purchase a car. The car Jordan plans to purchase costs $15,000. Jordan has saved $3,000 to
use as a down payment for the car. Jordan is offered credit terms of 5% APR for 5 years
In one year, how much interest will Jordan pay on this loan?

Answers

In one year, the interest that Jordan will pay on a loan to purchase a car that costs $15,000 with a downpayment of $3,000 at 5% APR for 5 years is $600.

How is interest calculated?

The interest can be computed using an online finance calculator for the 5 years period.

However, to calculate interest for one year, especially the first year, the loan amount is multiplied by the APR, as below.

Data and Calculations:

Cost of car = $15,000

Down payment = $3,000

Car loan = $12,000 ($15,000 - $3,000)

APR = 5%

Loan period = 5 years

Interest for one year (first year) = $600 ($12,000 x 5%)

Thus, the interest for the first year is $600.

Learn more about computing interest on the loan at https://brainly.com/question/24576997

impact of legislation on employees​

Answers

Employment law affects every aspect of the workplace. It determines your rights regarding hiring, wage and benefits, eligibility for overtime pay, discrimination, family and medical leave, termination, and more

PB10-4 (Algo) Comparing Bonds Issued at Par, Discount, and Premium [LO 10-3]
Marshalls Corporation completed a $540,000, 8 percent bond issue on January 1, 2021. The bonds pay interest each December 31 and mature 10 years from January 1, 2021.



Required:

For each of the three independent cases that follow, provide the amounts to be reported on the January 1, 2021, financial statements immediately after the bonds were issued

Answers

The amounts that would be reported on January 1, 2021, financial statements of Marshalls Corporation after the issuance of the bonds under these three independent cases are as follows:

Financial statements                  Case A             Case B             Case C

                                          (Issued at 100)   (Issued at 96)    (Issued at 104)

a. Bonds Payable                   $540,000         $540,000          $540,000

b. Unamortized Premium      

   (or discount)                      $0                         $21,600              $21,600

c. Carrying Value                 $540,000            $518,400           $561,600

Data and Calculations:

Face value of bonds payable = $540,000

Bond interest = 7%

Bonds issued at par (at 100):

Face value of bonds payable = $540,000

Cash proceeds = $540,000

Unamortized premium (or discount) = $0 ($540,000 - $540,000)

Bonds issued at discount (at 96):

Face value of bonds payable = $540,000

Cash proceeds = $518,400 ($540,000 x 96%)

Unamortized discount = $21,600 ($540,000 - $518,400)

Bonds issued at premium (at 104):

Face value of bonds payable = $540,000

Cash proceeds = $561,600 ($540,000 x 104%)

Unamortized premium = $0 ($561,600 - $540,000)

Question Completion:

Marshalls Corporation completed a $540,000, 7 percent bond issue on January 1, 2021. The bonds pay interest each December 31 and mature 10 years from January 1, 2018.

Required: For each of the three independent cases that follow, provide the following amounts to be reported on January 1, 2018, financial statements immediately after the bonds were issued: (Deductions should be indicated by a minus sign.) January 1, 2018—Financial statements Case A (Issued at 100) $ 650,000 Case B (at 96) 650,000 Case C (at 104) 650,000 $ $ a. Bonds Payable b. Unamortized premium (or discount) c. Carrying Value

Learn more about bonds payable at https://brainly.com/question/25524725

For a closed economy, gdp is $12 trillion, consumption is $7 trillion, taxes net of transfers are $3 trillion and the government runs a deficit of $1 trillion. What are private saving and national saving?.

Answers

Answer:

i don't know

Explanation:

ask you teacher

8.1. In the article the author confirms that a reduction of the budget deficit is imperative. Briefly discuss the possible methods of achieving this objective which are mentioned by the author as part of his thoughts. (3) 8.2. What is the main conclusion in terms of where to from hereby the author in this article? (3)​

Answers

The method of achieving the reduction in the budget deficit is to simply reduce expenses and increase tax.

What is a budget deficit?

It should be noted that budget deficit simply means when the expenses is more than the revenue.

In this case, the method of achieving the reduction in the budget deficit is to simply reduce expenses and increase tax. This is needed to improve the budget.

Learn more about budget on:

https://brainly.com/question/6663636

NEED HELP PLEASE
1. Explain why celebrity endorsements are risky agreements for companies.
2. Why do you think the FTC creates laws governing celebrity endorsements? To whom do these laws benefit?

Answers

Answer:

The FTC created laws governing celebrity endorsements to protect all parties involved in the endorsement because without them, celebrities could lie about their contracts

Explanation:

James has a credit card balance $5000 after Black Friday and he decides to pay $300 at the beginning of every month at 2.1% annual interest rate . In how many months can he pay off the balance

Answers

Answer:

16 months

Explanation:

2.1% of 300 is 6.3, 5000/3.06.3 = 16.32

What is the difference between the distribution and the consumption of an item?
A. One deals with the creation of an item; the other deals with the use of an item.
B. One deals with transporting the item from where it was produced to the location where it will be sold; the other deals with the consumer's use of the item after purchase.
C. One deals with deciding how much to charge for an item; the other deals with reconstructing the item in another format.
D. One deals with the creation of an item; the other deals with the transportation of the item from where it was made to where it will be sold.

Answers

Answer:

A. One deals with the creation of an item; the other deals with the use of an item.

Explanation:

Production means "To make" and consumption is putting to use of something.

The interest rate that lenders publish or advertise is usually:
A. the nominal interest rate.
B. the compound interest rate.
C. the simple interest rate.
ОО
D. the lowest interest rate.
Help me

Answers

Answer:

It’s A the nominal interest rate

Explanation:

Answer:

the nominal interest rate

Explanation:

Why is sea transport particularly important to the Caribbean?

Answers

Answer:

Transportation is recognised to be an inherently crucial component in supporting economic activities as well as providing opportunities for economic development. The provision of transport infrastructure has long been a common priority for governments, as the region has long been considered to be lacking in this area

Explanation:

Big brain

Swifty Corporation purchased a new machine on October 1, 2022, at a cost of $115,000. The company estimated that the machine will have a salvage value of $10,500. The machine is expected to be used for 10,000 working hours during its 5-year life. (a) Compute the depreciation expense under straight-line method for 2022. 2022 Depreciation expense $enter depreciation expense amount in dollar

Answers

The depreciation expense under straight-line method for 2022 is $5225.

What is the depreciation expense?

The straight-line depreciation allocates the depreciation expense evenly over the useful life of an asset.

Straight line depreciation expense = (Cost of asset - Salvage value) / useful life

(115,000 - $10,500) / 5 = $20,900

Depreciation expense in 2022 = 3/12 x 20,900  = $5225

To learn more about straight line depreciation, please check: https://brainly.com/question/6982430

What the 10 president

Answers

Answer:

John tyler

Explanation:

He was the tenth president of the USA

Lara uses the standard mileage method for determining auto expenses. During 2021, she used her car as follows: 18,400 miles for business, 3,680 miles for personal use, 5,520 miles for a move to a new job, 1,840 miles for charitable purposes, and 920 miles for medical visits. Presuming that all the mileage expenses are allowable (i.e., not subject to percentage limitations), what is Lara's deduction for?

Answers

Assuming  that all the mileage expenses are allowable  Lara's deduction for are:

Business $10,304Medical $294.4Charitable $128.8

Deduction

Using IRS mileage deduction rate for 2021

Deduction for business (56%)

Deduction for business= (18,400 x .56)

Deduction for business=$10,304

Deduction for medical (16%)

Deduction for medical= (1,840 miles x .16)

Deduction for medical=$294.4

Deduction for charitable (14%)

Deduction for charitable= (920 miles x .14)

Deduction for charitable=$128.8

Inconclusion Lara's deduction for are: Business $10,304, Medical $294.4 and Charitable $128.8.

Learn more about deduction here:https://brainly.com/question/8167631

Other Questions
Women's March on Rome find the riddle why (IM) did (B) the (O) chicken (R) cross (E) the (D) road?also there's a riddle and a hidden message and i'm bo red so share some embarassing stories that have happened to you to Friction creates heat and lowers the _______ HELPPPP big brains I need this urgently PLEASE HELP I NEED TO TURN THIS IN QUICKK Which statement is true about acceleration due to gravity?Select one:Acceleration due to gravity is not the same for every object.Acceleration due to gravity is not affected by mass.There is no difference between acceleration due to gravity and acceleration from an unbalanced force.Force is not affected by acceleration due to gravity. 10. An effort to justify a particular conclusion is a/an ... A. argumentB. opinionC. factD. fallacy Choose the correct answer. The themes of many folk tales are believed to be universal, which means that ____________________.A) they are about astrologyB) they are about the origins of the universeC) they have just one verseD) they are true for everyone Fast food restaurants keep food warm by placing them under heat lamps. These lamps transfer heat by what means? An electrician has an income of $41,500. The income tax the electrician has to pay is 12%. What is the amount of income tax that the electrician has to pay? A) $3,840 B) $4,164 C) $4,980 D) $5,210. 2. I am sweeping the floor. Your answer: Estoy barriendo el suelo. Estamos barriendo el suelo. Estar barriendo el suelo. Estoy barrer el suelo What is the area of the shaded sector of the circle? 20pi units squared 40pi units squared 180pi units squared 400 Cattle breeds in Philippines How many judges did trump appoint to the supreme court. why did fest and huch each refuse to pledge allegiance to Hitler Gabriella has the following winter accessories:1 winter coat: black2 hats: blue, purple2 pairs of boots: black, brown5 pairs of mittens: black, blue, purple, red, whiteFind the probability of wearing the coat with the purple hat, black boots, and purple mittens. Find the probability of wearing the coat with the purple hat,black boots,purple mittens? Nidah writes down two different prime numbers.She adds together her two numbers.Her answer is a square number less than 30Find two prime numbers that Nidah could have written down. Mathematician Whats 70x56,000+65,000,000 image Consider the graph of g(x) = x2 8x + 12. Identify the y-intercept, the vertex, and the zeros of the function. How did medievalMuslim scholars help advancethe field of mathematics?