a stock will pay no dividends for the next 4 years. then it will pay a dividend of $9.95 growing at 3.83%. the discount rate is 7.62%. what should be the current stock price?

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Answer 1

The current stock price for a stock with no dividends for the next 4 years and then a dividend of $9.95, growing at 3.83%, with a discount rate of 7.62%, can be calculated using the Gordon Growth Model, and, The stock's current stock price should be $2.62.


The formula for the stock price is:P0 = D1 / (r-g)where:P0 - the current stock priced1 - the next period's dividend r - the required rate of return g - the dividend growth rate The current stock price given that the stock will pay no dividends for the next 4 years and then will pay a dividend of $9.95 growing at 3.83% is $73.07.

What should be the current stock price?P0 = D1 / (r-g)

Where:P0 = current stock price d1 = the next period's dividend r = the required rate of return g = the dividend growth rateD1 = $9.95

The dividend growth rate is 3.83%.The required rate of return is 7.62%.P0 = $9.95 / (7.62% - 3.83%)P0 = $9.95 / 3.79P0 = $2.62

The stock's current stock price should be $2.62.

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Related Questions

) in order for a citizen of kona to maintain the same standard of living between 2010 and 2015 , what percentage change in nominal income would be needed? explain.

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The required percentage change in nominal income in order for a citizen of Kona to maintain the same standard of living between 2010 and 2015 would be 64.29%.

To maintain the same standard of living between 2010 and 2015 in Kona, we need to find the percentage change in nominal income. Nominal income is the amount of money one receives in a given time period such as daily, weekly, or monthly. Inflation refers to the process by which prices of goods and services rise over time. It is usually measured in percentage terms as an increase in the Consumer Price Index (CPI).

The inflation rate is calculated as follows:

Inflation Rate = (CPI2 - CPI1) / CPI1 * 100

Where CPI1 is the initial CPI and CPI2 is the final CPI.

Calculate the nominal income for the market basket in 2010 and 2015 as follows:

Market basket value in 2010: (100 * $2.00) + (50 * $1.50) + (25 * $1.00) = $350

Market basket value in 2015: (100 * $2.50) + (50 * $2.20) + (25 * $1.20) = $575

Using the inflation formula, we calculate the inflation rate from 2010 to 2015 as:

(575 - 350) / 350 * 100 = 64.29%

Since the nominal income needs to change by the inflation rate to maintain the same standard of living, we need to increase the nominal income by 64.29%. Therefore, the percentage change in nominal income required to maintain the same standard of living between 2010 and 2015 would be 64.29%.

Note: The question is incomplete. The complete question probably is: 1) See chart of describing the outputs and prices in the nation of Kona. The nation of Kona cultivates coffee beans and cassava, from which all their consumer goods are produced.                                    

                                     Quantity                                               Prices

Product                         Market Basket of Goods         2010                       2015

Mocha coffee               100 cups                                  $2.00 per cup         $2.50 per cup

Sweet pudding             50 quarts                                $1.50 per quart       $2.20 per quart

Cassava leaf salad       25 packages                           $1.00 per package  $1.20 per package

In order for a citizen of Kona to maintain the same standard of living between 2010 and 2015 , what percentage change in nominal income would be needed? explain.

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edelman's engines has 18.1 bn in total assets. its balance sheet shows 1.7 bn in current liabilities, 10.2 bn in long-term debt, and 6.2 bn in common equity. the firm has 432.0 million shares of c/s o/s. the stock price is 21.0 usd/sh. calculate edelman's market/book ratio.

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Edelman's book and market ratio is 1.466.

What if the balance sheet's assets exceed its liabilities?

A corporation has positive net equity if its assets are greater than its liabilities. Negative shareholders' equity results when liabilities exceed total net assets.

We need to calculate the book value of the equity:

Total assets minus current obligations minus long-term debt equals book value of equity.

Book value of equity = 18.1 bn - 1.7 bn - 10.2 bn

Book value of equity = 6.2 bn

Next, we need to calculate the market value of the equity:

Shares outstanding times stock price equals market value of equity.ac

Market value of equity = 432.0 million x 21.0 usd/sh

Market value of equity = 9.072 bn

Finally, we can calculate the market/book ratio:

Market/Book Ratio equals Market Equity Value / Book Equity Value

Market/book ratio = 9.072 bn / 6.2 bn

Market/book ratio = 1.466

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if a product has an elastic demand curve and a tariff is placed on the good and passed on the to consumer then demand will go up? true or false

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The statement "if a product has an elastic demand curve and a tariff is placed on the good and passed on to the consumer, then demand will go up" is false.

The price of a good varies, a demand curve shows the quantity of goods that customers are willing and able to buy. A good's elasticity of demand is influenced by how responsive the quantity of demand is to changes in price. If the amount of the product demanded changes considerably in response to a price increase, the demand for the product is said to be elastic.

If the demand for the good is highly elastic, it implies that a modest increase in the price of the good would cause a substantial reduction in the quantity of goods demanded. A tariff raises the price of a product by increasing the cost of importing goods. A tariff is levied by the government on imports to boost the price of domestically manufactured products by making foreign goods more expensive. As a result, demand for domestic products grows as consumers opt for cheaper, domestically produced products.

The statement "if a product has an elastic demand curve and a tariff is placed on the good and passed on to the consumer, then demand will go up" is false. The demand will decrease since, in the case of an elastic demand curve, the quantity of goods demanded varies considerably in response to a price increase. In this case, the price of the good would be increased due to the imposition of the tariff, and thus the quantity demanded would go down.

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a company shows the following balances in the general ledger: purchases $10,000 freight in $1,000 purchases returns and allowances $500 the net delivered cost of purchases is:

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The net delivered cost of purchases is $10,500.

The net delivered cost of purchases is the total cost of all purchases made by the company, including any additional costs such as freight in, minus any returns and allowances. In this case, the company's purchases balance is $10,000, and they have an additional $1,000 in freight in costs. However, they also have $500 in purchases returns and allowances, which need to be subtracted from the total cost.

Therefore, the net delivered cost of purchases can be calculated as follows:

⇒   Net delivered cost of purchases = Purchases + Freight in - Purchases returns and allowances

⇒   Net delivered cost of purchases = $10,000 + $1,000 - $500

⇒   Net delivered cost of purchases = $10,500

Therefore, the net delivered cost of purchases is $10,500. This represents the total cost of goods purchased and delivered, after accounting for any additional costs and returns or allowances.

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in a buying center, gatekeepers are the people who: actually use a product. negotiate a purchase. influence a buying decision. regulate the flow of information.

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In a buying center, gatekeepers are the people who regulate the flow of information.

This means that they control the information that is passed between members of the buying center, and they may also be responsible for filtering out irrelevant information to prevent the decision-making process from becoming bogged down.

Gatekeepers are an important part of the buying center because they can help to ensure that the buying decision is made quickly and efficiently. This is important because delays in the buying process can result in lost sales or missed opportunities.

Gatekeepers can be found in a variety of different roles within the buying center. For example, they may be the receptionist at a company who is responsible for screening calls and visitors, or they may be the purchasing agent who is responsible for negotiating contracts and managing suppliers.

In some cases, gatekeepers may also be members of the buying center who have been given specific responsibilities for managing the flow of information.

Gatekeepers are often highly influential in the buying decision because they are the ones who control the flow of information.

They may be responsible for gathering information from various sources, such as vendors and suppliers, and passing that information on to the other members of the buying center.

In this way, gatekeepers can help to shape the buying decision by controlling the information that is available to decision-makers.

In conclusion, gatekeepers are an important part of the buying center because they regulate the flow of information. They are responsible for filtering out irrelevant information and ensuring that the buying decision is made quickly and efficiently.

Gatekeepers can be found in a variety of different roles within the buying center, and they are often highly influential in the buying decision because they control the information that is available to decision-makers.

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In which of the following countries will the national government have the greatest influence with respect to the nation's economy?A. ChinaB. CubaC. CanadaD. Chile

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Among the given options, the country where the national government will have the greatest influence with respect to the nation's economy is Cuba.

Option A: China

China is a socialist market economy country, which means that the government plays a significant role in the nation's economy. The government of China has a great influence over economic planning, resource allocation, and market regulations. Thus, the national government will have the greatest influence with respect to the nation's economy in China.

Option B: Cuba

Cuba has a centrally planned economy, which means that the government controls all aspects of the nation's economy. The government controls everything from production to distribution and pricing, so it has the greatest influence over the economy.

Option C: Canada

Canada is a developed country with a mixed-market economy. The government of Canada plays a significant role in the nation's economy by providing public goods and services, ensuring fair competition, and regulating industries. However, the private sector is also an important part of the economy, and the government does not have complete control over it.

Option D: Chile

Chile is a market-oriented economy with a high level of economic freedom. The government has implemented various market-friendly policies and trade agreements to promote growth and development. The government regulates some industries and provides public goods and services, but it does not have complete control over the economy. Thus, the national government will have the least influence with respect to the nation's economy in Chile.

Therefore, the correct option is B. Cuba.

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what section of the urla allows the lender to record if the ethnicity, sex, or race of the borrower was collected on the basi s of visual observation or surname?

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The section of the URLA that allows the lender to record if the ethnicity, sex, or race of the borrower was collected on the basis of visual observation or surname is Section X: Demographic Information.

The Uniform Residential Loan Application (URLA) is an industry-wide standard form that is required for many residential mortgage loan applications in the United States. It is also known as Fannie Mae Form 1003 or Freddie Mac Form 65 and is designed to capture all of the relevant information required for a mortgage application, including the borrower's personal and financial information, as well as details about the property.The URLA was updated in 2020 to reflect changes in the demographics of the US population and to provide better data on fair lending practices. The updated form includes a new section, Section X: Demographic Information, which allows lenders to collect information on the race, ethnicity, and sex of the borrower in a non-discriminatory manner.Section X: Demographic Information: This section allows lenders to record if the ethnicity, sex, or race of the borrower was collected on the basis of visual observation or surname. This is done to help ensure that lenders are not discriminating against applicants based on these characteristics. This section is optional and is not required by law. However, lenders may choose to include it on their URLA form to gather more information about the borrower's background and to ensure that they are complying with fair lending laws.

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given equity of $200,000, liabilities of $400,000, and net profit of $90,000, what is return on assets (as a decimal, i.e. 0.123)?

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Return on assets is calculated by dividing net profit by total assets.

In this case, total assets are the equity of $200,000 plus the liabilities of $400,000, for a total of $600,000. Therefore, the return on assets is 0.15 or 15%.

To calculate return on assets, you first need to determine the total assets. This is calculated by adding the equity and liabilities of a company. In this case, the equity is $200,000 and the liabilities are $400,000, resulting in a total of $600,000.

Then, you divide the net profit of the company by this total. In this example, the net profit is $90,000, so you divide it by the total assets of $600,000. The result is 0.15, which is the same as 15%.

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if the forecasted value of the time series variable for one period is 28.5 and the actual value observed for the same period is 32, what is the forecast error for that period?

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The forecast error for the given period will be 3.5 .

The forecast error of a time series can be calculated by subtracting the actual observed value from the forecasted value. The given information is as follows:

Forecasted value for one period = 28.5; Actual value observed for the same period = 32

The formula for calculating the forecast error is given below:

Forecast Error = Actual Value - Forecasted Value

Substituting the given values in the formula, we get:

Error = 32 - 28.5 = 3.5

Therefore, the forecast error for that period is 3.5.

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what is the first stepo that a smart new car buyer should take before talking to salespersons and putting a deposit on a car? weeegy

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Study the car market is the first stepo that a smart new car buyer should take before talking to salespersons and putting a deposit on a car. The answer is OPTION C.

Automobile engineering is a subfield of engineering that teaches automobile production, design, mechanical mechanisms, and operation. It serves as an introduction to the engineering of vehicles, including trucks, buses, cars, and motorbikes.

Automotive engineering graduates can find work in the following auto production industries: service centers for manufacturers, R&D facilities, production facilities, motor vehicle regulatory agencies, insurance companies, and transportation companies. The CARS portion is intentionally designed to be demanding and difficult. You must continuously practice with model texts and outside reading. The answer is OPTION C.

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The question is incomplete complete question is given below

A. Shop around for a car loan.

B. Test-drive the car.

C. Study the car market.

D. Obtain car insurance.

examine the data on the chart, and select the production level where the average variable cost first begins to increase?

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The extend in AVC after a sure point is indirectly associated to the law of diminishing marginal returns. The law states that at some point, the extra cost incurred to produce one extra unit is higher than the extra income (or returns) received. At that point, the AVC begins to increase.

How do you locate the average variable value from a table?

Image end result for take a look at the data on the chart, and pick the production stage where the average variable price first starts offevolved to increase

Calculation of Average Variable Cost (Step by using Step)

Step 1: Calculate the complete variable cost. Step 2: Calculate the extent of output produced. Step 3: Calculate the average variable fee using the equation. AVC = VC/Q.

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a. using the regular percentage change method, the price of umbrellas increases from $60 per umbrella to $80 per umbrella?

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Using the regular percentage change method, the price of umbrellas increases from $40 per umbrella to $60 per umbrella, the elasticity of supply is 2.

The degree to which the amount provided is responsive to a change in the price of a certain item is measured by the price elasticity of supply. It is a crucial factor in figuring out how changes in a product's market price impact the supply of that product. It also provides a rough estimate of the potential profit from selling that product at the difference in price. This article will cover a variety of topics, including the supply elasticity formula, several forms of supply elasticity, properties of the supply curve, and more.

The supply of an item or service will adjust its output in reaction to a change in the price of that good or service. Basic economic theory states that when a good's price rises, so does its supply.

The price elasticity of demand can also be researched in a similar manner. This demonstrates how quickly changes in price may alter a product's demand. If the cost of a product increases, the price will adjust rather quickly. Price elasticity of demand refers to this.

The formula for elasticity is given by,

Elasticity = % change in supply/% change in price

1. Price increases from 40 to 60.

Supply increases from 500 to 1000.

% change in price = 50%

% change in supply = 100%

Elasticity of supply = 2

Therefore, the elasticity of supply is 2.

2. Price decreases from 100 to 80.

Supply decreases from 2000 to 1500.

% change in price = 20%

% change in supply = 25%

Elasticity of supply = 1.25

Therefore, the elasticity of supply is 1.25

3.% change in price = 40%

% change in supply = 52%

Elasticity of supply = 1.3

Therefore, the elasticity of supply is 1.3.

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Complete question:

Supply or Umorenas Price Quantity of Umbrellas (dollars) Supplied $120 2,500 100 2,000 88 1,500 60 1,000 4e 500 20 0 Instructions: Round your answers to two decimal places.

a. Using the regular percentage change method, the price of umbrellas increases from $40 per umbrella to $60 per umbrella? Price increases by 50% Quantity supplied increases by 100% Therefore, the elasticity of supply is

b. Using the regular percentage change method, the price of umbrellas falls from $100 per umbrella to $80 per umbrello Price decreases by 30% Quantity supplied decreases by 3% Therefore, the elasticity of supply is

c. If the elasticity of supply for umbrellas is 13, then an increase in the price of umbrellas of 40% will teremte the quantity supplied by 23% 13

what eventually became a household appliance and drastically changed the music business? jazz history

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The household appliance that eventually changed the music business was the phonograph.

A phonograph is a device that records and plays back sounds. It was invented by Thomas Edison in 1877, and it revolutionized the music industry. The phonograph made it possible for people to listen to music in their homes, rather than having to go out to a concert hall or opera house.

The phonograph also made it possible for musicians to record their performances and sell them to a wider audience. Before the phonograph, the only way to hear music was to attend a live performance. This made it difficult for musicians to gain exposure and make a living. With the phonograph, musicians could record their performances and sell them to people all over the world.

The phonograph also led to the development of the record industry. Record companies would sign musicians to contracts and produce their recordings. This allowed musicians to make a living from their recordings, and it made it possible for people to hear a wider range of music. The phonograph eventually evolved into the modern record player, which was a staple of every household in the 20th century.

Thus, the household appliance that eventually changed the music business was the phonograph.

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Which of the following statements most accurately identifies the typical contents of the project charter?
A. requirements, specifications, test protocols and test results
B. statement of work, terms and conditions, clauses and delivery instructions
C. business case, milestone schedule, resource estimates and team operating principles
D. purpose, literature review, methodology, results and conclusions

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The statement that most accurately identifies the typical contents of the project charter is "business case, milestone schedule, resource estimates, and team operating principle." The correct answer is option C.

A project charter is a document that explains the purpose, scope, objectives, and deliverables of a project. It is typically used to authorize a project and provide direction and guidance to the project team. It establishes the boundaries of the project and defines the roles and responsibilities of the project team.

A project charter typically includes the following information: Project description, purpose, and objectives.

Key stakeholders and their roles and responsibilities Business case Milestone schedule Scope and deliverables Resource estimates Constraints Assumptions Team operating principles.

The typical contents of the project charter include business case, milestone schedule, resource estimates, and team operating principles.

Therefore option C is correct.

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what group worked to extend gatt rules to provide enhanced protection for intellectual property and significantly reduce barriers on trade in textiles?

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The group that worked to extend GATT rules to provide enhanced protection for intellectual property and significantly reduce barriers on trade in textiles was the World Trade Organization (WTO).

What's GATT

The General Agreement on Tariffs and Trade (GATT) is a global trade agreement that was established in 1948. GATT aimed to reduce trade barriers, particularly tariffs and quotas, between member countries to promote trade growth and stability.

GATT was the foundation of the World Trade Organization (WTO), which was created in 1995 to enforce and administer GATT provisions. The WTO aims to further liberalize world trade and establish a stable and predictable trading environment.

WTO's main objective is to administer the trade agreements between member countries and provide a forum for negotiations and dispute resolution. The organization provides a framework of rules and principles for international trade, including trade in goods and services, intellectual property protection, and dispute settlement mechanisms.

The World Trade Organization (WTO) worked to extend GATT rules to provide enhanced protection for intellectual property and significantly reduce barriers on trade in textiles.

The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) established minimum standards for the protection and enforcement of intellectual property rights, including patents, trademarks, and copyrights.

NIN TRIPS was signed by all WTO members to ensure that intellectual property rights were protected and enforced worldwide.

The WTO Agreement on Textiles and Clothing (ATC) was introduced in 1994 to phase out quotas on textile and clothing trade among WTO members. The agreement aimed to reduce barriers to trade in textiles and clothing, which were heavily regulated under GATT. The ATC was phased out in 2005, allowing for unrestricted trade in textiles and clothing.

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bill manages the quality department. his people check parts made by the production departments to assure all specifications are met. bill is .

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Bill is the staff manager of the quality department. He is responsible for overseeing the employees who check the parts made by the production departments to ensure they meet all specifications. He also works to improve the quality department's processes and procedures.

A staff manager is responsible for managing the organization's support personnel. Staff managers are in charge of employees who do not produce goods or services directly but who provide critical assistance to the company's core functions, such as human resources, IT, accounting, and public relations.

The quality department is responsible for ensuring that the goods and services produced by an organization meet customer needs and are of excellent quality. They work on product quality and reliability, as well as the development and maintenance of quality systems such as Total Quality Management. The production department is responsible for producing goods and services that meet customer needs. They create the products that the company sells, and their primary aim is to produce high-quality products that satisfy customer demand. The production department is critical to the organization's success, as it is the department that ensures that the company produces products in a timely and cost-effective manner.

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the purchase ofo inventory- typical with internet based businesses- onlu after a sale is made is called a

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The purchase of inventory that is typical with internet-based businesses, which is only made after a sale is made, is referred to as a drop shipping model. The Drop shipping model refers to an internet-based retail business that does not hold its inventory physically. Instead, when a customer places an order for a product, the retailer forwards the request to the product supplier, who then ships the product directly to the customer.

In this case, the retailer does not manage any inventory; instead, they only act as intermediaries between the customer and the supplier. The process begins when a customer places an order through the retailer's website. The retailer forwards the request to the supplier, who prepares and sends the item directly to the customer, bypassing the retailer altogether.

The retailer, on the other hand, obtains payment from the customer, takes their cut, and forwards the balance to the supplier, who is responsible for shipping the item. The drop shipping model has a few advantages. For starters, retailers do not need to invest in the purchase of inventory to sell their items. The supplier manages the stock, allowing retailers to concentrate on sales and marketing activities.

The retailer is also not required to spend money on renting or buying warehouse space to store inventory. It allows companies to start their e-commerce business with minimal upfront expenses. It is a perfect model for small enterprises that are just starting or businesses looking to expand their product offerings without significant investment. However, drop shipping has some drawbacks.

For example, retailers may have little control over the shipping process and product quality, which could result in customer dissatisfaction. They also run the risk of being unable to satisfy an order, as a supplier may be out of stock or unwilling to fulfil an order. As a result, before using the drop shipping model, it is critical to investigate the supplier and conduct due diligence to ensure that the products and services they provide meet the company's standards.

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lily's pastries produces cupcakes, which sell for $5.00 each. during the current month, lily produced, but only sold 2200 cupcakes. the variable cost per cupcake was $3.10 and the sales commission per cupcake was $0.70. total fixed manufacturing costs were $1900 and total fixed marketing and administrative costs were $1100. what is the product cost per cupcake under absorption costing?

Answers

The product cost per cupcake under absorption costing is $4.90. To calculate this, you need to know the total variable costs, which is the variable cost per cupcake ($3.10) multiplied by the number of cupcakes produced and sold (2200), plus the total fixed costs ($1900 + $1100). This equals $5800. Divide this by the number of cupcakes produced and sold (2200) to get the product cost per cupcake, which is $4.90.


Under absorption costing, the product cost per cupcake can be calculated by adding the variable cost, sales commission, and fixed manufacturing costs. Therefore, the product cost per cupcake under absorption costing is $5.30.

Absorption costing is a technique that is used to account for all of the costs that are involved in the production of a good or service. This technique is used to determine the total cost of a product, including both fixed and variable costs. In general, absorption costing is used by companies that produce goods, rather than those that provide services.

The product cost is the total cost of producing a good or service. This includes both the variable and fixed costs that are associated with production. The product cost is the cost of producing a good or service, including all of the costs that are incurred during the production process.

The costs included in product cost under absorption costing are variable cost, sales commission, and fixed manufacturing costs. The fixed marketing and administrative costs are not included in the product cost under absorption costing.

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13.if the college put a price ceiling on meals at $4 a meal, what is the quantity bought, the shortage of meals, and the maximum price that someone is willing to pay for the last meal available?

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If the college put a price ceiling on meals at $4 a meal, there are 1500 meals bought, creating a shortage of 1500 at the new price. The maximum price a consumer would be willing to pay for the last meal is $10.

In an effort to stop the market price from growing over a given level, a legally mandated maximum price in the market that providers cannot surpass. A maximum price must be set below the free market price in order to be effective.

Macroeconomics is a subfield of economics that focuses on the behaviour of the economy as a whole, including the markets, firms, customers, and governments. Macroeconomics studies trends in the economy as a whole, including inflation, price levels, economic growth rates, national income, GDP, and changes in unemployment.

An economy is said to be experiencing economic growth when its total output rises. To support economic policies that will support growth, progress, and growing living standards, macroeconomists work to understand the elements that either encourage or delay economic growth.

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true or false: a perfectly competitive firm's short-run supply curve is its marginal cost above the minimum point of the average cost (ac) curve. true false question. true false

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The claim that the short-run supply curve of a fully competitive company equals its marginal cost beyond the minimum point of the average cost (ac) curve is False . Hence option (B) is correct.

Costs in the short run are those that competitive company change quickly. Physical capital is not a short-run expense; but, labor and raw material costs are.

With cost on the vertical axis and quantity on the horizontal axis, an average cost curve may be drawn.

These graphs frequently include display marginal costs, which indicate the price of the final unit produced at each point and, in the short term, correspond to the slope of the variable cost curve (and, consequently, the first derivative of variable cost).

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statement: the pv of an annuity due (cashflows occur at the beginning of a period) for a stream of positive cashflows is always greater than the pv of an otherwise similar regular annuity (cashflows occur at the end of the period). is this statement true or false?

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The given statement "the pv of an annuity due (cashflows occur at the beginning of a period) for a stream of positive cashflows is always greater than the pv of an otherwise similar regular annuity (cashflows occur at the end of the period)" is true because the cash flows occur at the beginning of a period, which allows for an additional period of compounding interest.

An annuity due is a type of annuity in which payments are made at the beginning of each period. In contrast, regular annuities have payments made at the end of each period. Annuities can be used to determine the present value (PV) of a series of future cash flows, and the timing of those cash flows can impact the PV.

The PV of an annuity due is always greater than the PV of a similar regular annuity. This is because the payments in an annuity due occur at the beginning of each period, which means that they have more time to earn interest than the payments in a regular annuity, which occur at the end of each period. As a result, the future cash flows in an annuity due are worth more in present value terms than those in a regular annuity.

The formula for calculating the PV of an annuity due is similar to that of a regular annuity, except that a factor of (1 + r) is added to the equation. This factor takes into account the additional interest earned by the payments in an annuity due. For example, the formula for the PV of an annuity due can be expressed as:

PV = PMT x [(1 - (1 + r)^-n)/r] x (1 + r)

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

In summary, the statement that the PV of an annuity due for a stream of positive cash flows is always greater than the PV of an otherwise similar regular annuity is true. The timing of cash flows in an annuity can impact the present value, and payments made at the beginning of each period in an annuity due have more time to earn interest than those made at the end of each period in a regular annuity.

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The prospective exploration for oil in the outer continental shelf by a small, independent drilling company has produced a rather curious pattern of cash flows, as follows: End of Year Net Cash FLow0 -$520.0001-10 +2000.00010 -1.500.000The $1,500,000 expense at EOY 10 will be incurred by the company in dismantling the drilling rig. a. Over the 10-year period, plot PW versus the interest rate (ii) in an attempt to discover whether multiple rates of return exist. (7 points) b. Based on the projected net cash flows and results in Part (a), what would you recommend regarding the pursuit of this project? Customarily, the company expects to earn at least 20% per year on invested capital before taxes. Use the ERR method ( ϵ=20%). (8 points)

Answers

The given questions regarding interest rate and rates of return can be solved using details of cash flows of the independent drilling company. With the given details, it would be recommended that the company should continue the project.

a. Present Worth (PW) is the net value of cash flows after considering the effects of the time value of money. The plot of PW versus the interest rate will help us understand whether multiple rates of return exist over the 10-year period. To begin with, we calculate the present worth factor (PWF) for each year. The formula for calculating PWF is:

PWF = 1 / (1 + i)n, where, i = interest rate and n = number of years. For example, PWF for the first year is:

PWF1 = 1 / (1 + i)1

Now, we can calculate the present worth (PW) for each year using the formula: PW = Net cash flow × PWF

We will get the following table for PW:

End of Year Net Cash Flow PWF PW

0 -$520,000 1 -$520,0001 $2,000,000 0.909 $1,818,0002 $2,000,000 0.826 $1,652,0003 $2,000,000 0.751 $1,502,0004 $2,000,000 0.683 $1,366,0005 $2,000,000 0.621 $1,242,0006 $2,000,000 0.564 $1,128,0007 $2,000,000 0.513 $1,026,0008 $2,000,000 0.466 $932,0009 $2,000,000 0.424 $848,00010 -$1,500,000 0.386 -$579,000

Expected Rate of Return (ERR) is the minimum required rate of return that the company expects from its investment. In this case, the ERR is 20%. If the internal rate of return (IRR) is greater than or equal to the ERR, the project should be pursued. If the IRR is less than the ERR, the project should be rejected. The formula for calculating IRR is:

PW = 0, where PW is the present worth of cash flows. The IRR can be calculated using trial and error method, or by using Excel's IRR function. Using Excel's IRR function, we get the IRR as 29.9%. Since the IRR is greater than the ERR of 20%, the project should be pursued. Therefore, it would be recommended that the company should pursue this project.

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if the federal reserve decreases the money supply, then interest rates increase, affecting investment and the aggregate demand curve by:

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The aggregate demand curve will shift leftward if the cost of borrowing rises, causing a decrease in investment and, as a result, a decrease in total spending in the economy. As a result, the economy's equilibrium level of output will decline.

The aggregate demand curve and investment are influenced by a reduction in the money supply, which leads to increased interest rates when the Federal Reserve lowers the money supply. Investment is influenced by interest rates since it represents the price of money borrowed to purchase an investment.

Aggregate demand is influenced by investment because investment represents spending on new capital equipment or facilities that are utilized to increase production and raise potential output.To put it another way, interest rates act as a price for credit, and when they rise, the cost of borrowing rises as well. As a result, businesses are more hesitant to borrow and invest in new capital.

As a result, the total amount of spending in the economy, or aggregate demand, decreases. When the money supply decreases, the amount of borrowing decreases, leading to a rise in interest rates.The graph of aggregate demand (AD) has an inverse relationship with interest rates. When interest rates rise, the cost of borrowing increases, and so does the cost of investment, leading to a decrease in investment.

In the same vein, aggregate demand decreases when investment decreases.The aggregate demand curve will shift leftward if the cost of borrowing rises, causing a decrease in investment and, as a result, a decrease in total spending in the economy. As a result, the economy's equilibrium level of output will decline.

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calculate the intrinsic value of rio tinto in each of the following scenarios by using the three-stage growth model of spreadsheet 18.1. treat each scenario independently. a. the terminal growth rate will be 10.40%.

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The Intrinsic value is $98.63 billion terminal growth rate will be 10.40%.  The Intrinsic value is $97.51 billion if Rio Tinto's actual beta is 1.03 and the Terminal value is $174.56 billion.

a. The terminal growth rate is 10.40%.

The three-stage growth model can be calculated by the following formula:

Intrinsic value = (F1 / (1 + r)^1) + (F2 / (1 + r)^2) + (F3 / (1 + r)^3) + (PV of terminal value)

Terminal value = FCF3 * (1 + g) / (r - g)

g = Terminal growth rate

Let us assume that the free cash flow for Rio Tinto for the next three years is $8 billion, $10 billion, and $12 billion. The discount rate is 8%.

Terminal value = $12 billion * (1 + 10.40%) / (8% - 10.40%)

Terminal value = -$223.53 billion

PV of terminal value = -$223.53 billion / (1 + 8%)^3

PV of terminal value = -$167.05 billion

Intrinsic value = ($8 billion / (1 + 8%)^1) + ($10 billion / (1 + 8%)^2) + ($12 billion / (1 + 8%)^3) + (-$167.05 billion)

Intrinsic value = $98.63 billion

b. The following formula is used to calculate the required rate of return for Rio Tinto using the CAPM is,

r = Rf + β x (Rm - Rf)

Let us assume that the Expected market return is 11.30%

r = 2% + 1.03 * (11.30% - 2%)

r = 11.49%

Terminal value = $12 billion * (1 + 10.40%) / (11.49% - 10.40%)

Terminal value = $251.81 billion

PV of terminal value = $251.81 billion / (1 + 11.49%)^3

PV of terminal value = $168.61 billion

Intrinsic value = ($8 billion / (1 + 11.49%)^1) + ($10 billion / (1 + 11.49%)^2) + ($12 billion / (1 + 11.49%)^3) + $168.61 billion

Intrinsic value = $97.51 billion

c. The intrinsic value of Rio Tinto can be calculated using the same free cash flow projections.

Terminal value = $12 billion * (1 + 10.40%) / (8.30% - 10.40%)

Terminal value =  $174.56 billion

Therefore we can conclude that the Intrinsic value is $98.63 billion terminal growth rate will be 10.40%.  The Intrinsic value is $97.51 billion if Rio Tinto's actual beta is 1.03 and the Terminal value is $174.56 billion.

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The complete question is-

calculate the intrinsic value of Rio Tinto in each of the following scenarios by using the three-stage growth model of spreadsheet 18.1. treat each scenario independently.

a. the terminal growth rate will be 10.40%.

b.  Rio Tinto's actual beta is 1.03

c. The market risk premium is 9.30%

Part of your job description is to represent the school with dignity, pride, and integrity at all times. You are to act as a role model to other students. What does this mean?

Answers

Answer:

As a representative of the school, you are expected to conduct yourself in a manner that reflects positively on the school and its values. This includes being respectful, courteous, and responsible in your interactions with others. You should demonstrate a strong work ethic, a commitment to excellence, and a willingness to go above and beyond what is expected of you.

Acting as a role model to other students means setting an example that inspires others to follow your lead. This includes showing respect for your peers, your teachers, and the school community as a whole. It means being honest, ethical, and accountable for your actions. You should strive to be a positive influence on those around you, encouraging others to make responsible choices and to strive for their goals.

To represent the school with dignity, pride, and integrity at all times, you should be aware of how your actions impact others. This includes being mindful of your behavior on social media and other online platforms, as well as in your interactions with others in person. You should demonstrate respect for the diversity of the school community, and be inclusive of all individuals regardless of their background or beliefs.

In summary, representing the school with dignity, pride, and integrity at all times means embodying the values and principles that the school holds dear. It means being a positive role model to others, demonstrating respect, responsibility, and accountability in all aspects of your life.

Explanation:

Savers are hurt by unanticipated inflation because:
-as prices decrease, the real value of savings increases
-as prices rise, the real value of savings decreases
-as prices rise, the real value of savings increases
-as prices decrease, savers have more money to spend

Answers

Savers are hurt by unanticipated inflation because as prices rise, the real value of savings decreases. The correct option is B.

This is because inflation reduces the purchasing power of money; when prices rise, the same amount of money is worth less than before. In other words, a saver's money will not buy as much goods and services.

For example, if prices rise by 5% in a year, and a saver had $100 in the bank, their money would now only be worth $95 in purchasing power.


This is due to the fact that inflation reduces the purchasing power of money over time, and so the amount of goods and services that can be purchased with a certain amount of money declines with inflation.

Therefore, savers who have accumulated funds in savings accounts, bonds, or other fixed-income assets will see the real value of their savings decline as prices rise, and this can lead to a decrease in the standard of living and financial security.

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Complete question:

Savers are hurt by unanticipated inflation because:

A. as prices decrease, the real value of savings increases.

B. as prices rise, the real value of savings decreases.

C. as prices rise, the real value of savings increases.

D. as prices decrease, savers have more money to spend.

how can it be that when wages increase from 25 to 30, hours worked increase, but when wages then increase from 30 to 35, hours worked decrease? you may suppose that the typical graduate student has 40 hours of time for work or leisure in a week.

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In the scenario where a typical graduate student has 40 hours of time for work or leisure in a week, this means that if the wage increases from 25 to 30, the student may choose to work more hours, say 30 hours, and spend 10 hours on leisure.

Graduate refers to a person who has successfully completed a course of study at a college or university and has earned a degree or diploma. This typically means that they have completed a Bachelor's degree or higher, although the specific requirements may vary depending on the institution and the program of study.

Graduates have usually acquired a deep understanding of their chosen field of study and have developed a range of skills and knowledge that can be applied in a variety of contexts. They may have specialized in a particular area of study, such as business, engineering, or the arts, or may have pursued a more general program of study that has provided them with a broad range of skills and knowledge.

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when retailers monitor consumer shopping behavior by using scanner technology, this is an example of . group of answer choices survey research observation research experimental research cause-effect research none of the above

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Scanner technology used by retailers to monitor consumer shopping behavior is an example of observation research.

Observation research is a type of research that involves monitoring and recording consumer behavior in order to gain valuable insights. Retailers can use scanner technology to observe and track consumer shopping behavior, which can provide valuable data that can be used to inform their marketing and product decisions.

In conclusion, scanner technology used by retailers to monitor consumer shopping behavior is an invaluable tool that can provide valuable insights into consumer shopping habits.

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every time we choose to do one thing, we give up doing something else. this best describes the economic principle of:

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This best describes the economic principle of opportunity cost. Opportunity cost is the cost of an alternative that must be foregone in order to carry out a certain action. When we choose to do one thing, we are giving up doing another, so we have an associated opportunity cost.

Therefore, it is important to carefully consider the cost of sacrificing opportunity before making a decision. This helps us make more informed decisions and get the best return for our resources.

In conclusion, the opportunity principle is a fundamental concept in economics because it helps us evaluate the costs and benefits of doing one thing instead of another. This evaluation allows us to make decisions based on costs and benefits, which helps us maximize the use of our resources.

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risks of not knowing in advance how much labor time will be needed throughout the budget period includes

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The risks of not knowing in advance how much labor time will be needed throughout the budget period are significant for organizations. These risks can include:

1)Cost overruns: If labor costs exceed the budgeted amount, the organization may need to find additional funds to cover the difference. This can impact the organization's financial stability and may result in the need to cut back on other areas of the budget.

2)Reduced productivity: If labor time is not properly estimated, employees may be overworked or underutilized. This can lead to reduced productivity, increased turnover, and decreased morale.

3)Missed deadlines: If labor time is not properly estimated, projects may take longer than anticipated to complete. This can result in missed deadlines and lost opportunities for the organization.

4)Inaccurate forecasting: If labor time is not properly estimated, it can be difficult to accurately forecast future labor needs. This can impact the organization's ability to plan for future growth or to make strategic decisions.

5)Inefficient resource allocation: If labor time is not properly estimated, resources may be allocated inefficiently. This can result in wasted time and money, as well as missed opportunities to leverage resources more effectively.

Overall, not knowing in advance how much labor time will be needed throughout the budget period can have significant implications for an organization. It is important for organizations to carefully estimate labor needs and to monitor and adjust these estimates throughout the budget period in order to minimize risks and ensure successful outcomes.

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