The expected profit from buying the shares at that amount would be $ 14.
How to find the expected profit ?To calculate your expected profit from buying 100 stocks at $1.75 a share with an ROI of 8%, you need to use the following formula:
Expected profit = Investment x ROI
In this case, your investment is:
Investment = 100 shares x $1.75 per share
Investment = $175
Your ROI is 8%, which can be expressed as a decimal:
ROI = 0.08
Therefore, your expected profit is:
Expected profit = $175 x 0.08
Expected profit = $14
So your expected profit from buying 100 stocks at $1.75 a share with an ROI of 8% is $14.
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a ceo recently led her company through a period of significant growth and profitability. her structure change, new strategy, and other decisions caused the company to grow beyond expectations. as a result of her efforts, the ceo and her company won several awards and received press in magazines such as forbes, inc., and chief executive. but recently her decisions have been poor, which may have to do with lack of analysis and attention to the details of projects put before her. when her team suggests alternatives, she pushes back. what most likely happened to the ceo?
Based on the information provided, it seems that the CEO may have become overconfident in her abilities and success, leading her to neglect the details and analysis needed for successful decision-making.
How the effects of being overconfident?This could have resulted in poor decisions and resistance to alternatives suggested by her team. It is possible that the CEO is experiencing a decline in performance or burnout, or she may need to re-evaluate her approach to decision-making and collaboration with her team.
It is important for leaders to continue to seek feedback and adapt to changing circumstances in order to maintain success over time.
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18 HW Asgmt 10 A STRIPS traded on April 30, 2020, matures in 18 years on May 1, 2032. Assuming a yield to maturity of 4.8 percent, what is the STRIPS price? (Use Excel to answer this question, Enter y
The price of the 18-year STRIPS traded on April 30, 2020, with a yield to maturity of 4.8 percent, can be calculated using the Excel PV function
Calculate the price of the 18-year STRIPS that traded on April 30, 2020, and matures on May 1, 2032, with a yield to maturity of 4.8 percent.
Identify the information provided:- Time to maturity: 18 years, Yield to maturity (YTM): 4.8% ,Calculate the present value (price) of the STRIPS using Excel: Use the formula "=PV(rate, nper, pmt, fv)" in an Excel cell,Enter the YTM (rate) as "0.048" (convert the percentage to a decimal),
Enter the time to maturity (nper) as "18",Leave the "pmt" value blank or enter "0" (as there are no periodic payments for STRIPS), Enter the future value (fv) as "1" (assuming a face value of 1).Interpret the result: The Excel cell will display the present value (price) of the STRIPS.
The price of the 18-year STRIPS traded on April 30, 2020, with a yield to maturity of 4.8 percent, can be calculated using the Excel PV function as described above.
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What is the payback period for the following set of cash
flows?(Can I please get a full step on how to get to the
answer?)
Year
Cash Flow
0
−$ 3,200
1
2,700
2
2,600
3
2,600
4
2,700
The payback period is the length of time it takes for an investment to recoup its initial costs. payback period is 1.18 years.
To calculate the payback period for a set of cashflows, we take the initial investment and divide it by the annual cash flow. For example, in the given set of cashflows, the initial investment is -$3,200, and the annual cash flows for each year are: $2,700, $2,600, $2,600, and $2,700.
We divide the initial investment by the first annual cash flow of $2,700, which gives us a payback period of 1.18 years. This means that it will take 1.18 years for the initial investment to be recouped. The remaining cash flows will then be considered profit.
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your mortgage broker also offers you a mortgage with 3 points and a 5.25% interest rate. what is your monthly payment on this option? you have just bought a new house for $360,000 and are taking out a mortgage for $288,000.
The monthly payment on a mortgage with 3 points and a 5.25% interest rate for a $288,000 loan is $1,689.28. To calculate the monthly payment on a mortgage with 3 points and a 5.25% interest rate, we need to first calculate the total cost of the points.
Points are equal to a percentage of the total loan amount, and each point typically costs 1% of the loan amount. So for a $288,000 loan, 3 points would cost 3% x $288,000 = $8,640.
Next, we need to calculate the loan amount plus the points.
Loan amount + points = $288,000 + $8,640 = $296,640
Now we can use the formula for a fixed-rate mortgage to calculate the monthly payment:
Monthly payment = [P x R x [tex](1+R)^N[/tex]] / [([tex]1+R)^N[/tex] - 1]
Where P is the loan amount, R is the monthly interest rate, and N is the total number of payments (the term of the loan in months).
To find the monthly interest rate, we divide the annual interest rate (5.25%) by 12:
Monthly interest rate = 5.25% / 12 = 0.004375
The term of the loan is typically 30 years, or 360 months.
Now we can plug in the values:
Monthly payment = [$296,640 x 0.004375 x [tex](1+0.004375)^{360}[/tex]] / [[tex](1+0.004375)^{360}[/tex] - 1]
Monthly payment = $1,689.28
Therefore, the monthly payment on a mortgage with 3 points and a 5.25% interest rate for a $288,000 loan is $1,689.28.
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the use of financial incentives to improve productivity is most closely related to which theory of motivation?
The use of financial incentives to improve productivity is most closely related to the reinforcement theory of motivation. This theory suggests that behavior can be strengthened or weakened by the consequences that follow it. In this case, the financial incentive is the consequence that is intended to strengthen the desired behavior of improved productivity.
What is Reinforcement theory of motivation.Reinforcement theory was first recognized in the work of psychologist Ivan Pavlov (behavioral conditioning) and B. F. Skinner (operant conditioning).
Reinforcement theory says that behavior is driven by its consequences. As such, positive behaviors should be rewarded positively. Negative behaviors should not be rewarded or should be punished.
The difficulty in employing this theory is that it is not always easy to determine what types of behavior should be rewarded.
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1) in what ways russia's invasion of ukraine has affected global business and multinational enterprises so far?
The invasion has created an uncertain environment for global businesses and multinational enterprises, impacting trade, market stability, and risk management strategies.
The effects of Russia's invasion of UkraineThe Russia's invasion of Ukraine has significantly impacted global business and multinational enterprises in several ways.
First, economic sanctions imposed by various countries against Russia have disrupted trade relations, making it difficult for businesses to operate in or with Russia. This includes restricted access to financial markets, reduced investments, and limitations on exports and imports.
Second, the geopolitical instability has led to increased volatility in global markets, affecting stock prices, commodity prices, and foreign exchange rates.
For instance, energy prices have soared, especially for oil and gas, as Russia is a major supplier. This has implications for businesses relying on these resources and may cause disruptions in supply chains.
Third, the conflict has resulted in companies reevaluating their risk management strategies, potentially reconsidering investments or expansion plans in the region.
Some multinational enterprises may even choose to divest from Russia or the affected areas, incurring costs and losses.
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discuss is assigning control of it budgets to user departments an effective mechanism to establish it priorities?
Assigning control of IT budgets to user departments can be an effective mechanism to establish IT priorities. This approach ensures that departments have ownership of their IT spending, which helps to ensure that IT resources are allocated in line with departmental objectives.
By giving departments control over their IT budgets, they are more likely to prioritize investments that will benefit their specific business needs. This can result in better alignment between IT and business strategies, which can lead to improved organizational performance.
Moreover, assigning control of IT budgets to user departments can also lead to greater accountability for IT spending. Departments are more likely to carefully consider their IT spending decisions when they have to justify them to management. This can result in better decision-making and improved overall performance.
However, it's important to note that assigning control of IT budgets to user departments should be done in conjunction with a centralized IT governance framework. This framework should establish clear guidelines for IT spending and provide oversight to ensure that departmental decisions align with organizational objectives.
In summary, assigning control of IT budgets to user departments can be an effective mechanism to establish IT priorities, but it should be done in conjunction with a centralized IT governance framework to ensure alignment with organizational objectives and effective use of resources.
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a nurse at a pediatric clinic is assessing a young client at a well-child visit. after the assessment, the nurse determines the child is in erikson's autonomy stage based on which finding?
Based on Erikson's theory of psychosocial development, the autonomy stage typically occurs during the toddler and early childhood years (ages 1 to 3 years). During this stage, children develop a sense of independence and autonomy as they learn to assert their will and make choices.
Based on this understanding, the nurse at the pediatric clinic may determine that the child is in Erikson's autonomy age if they observe behaviors such as the child attempting to feed themselves, trying to dress themselves, or insisting on making choices such as what toys to play with or what clothes to wear. The child may also exhibit signs of asserting their own preferences and desires and may resist attempts by others to control or restrict their choices, indicating a developing sense of autonomy and independence. The nurse's assessment may include observing the child's behaviors and interactions to determine their developmental stage according to Erikson's theory.
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According to Erikson's theory of psychosocial development, the autonomy vs. shame and doubt stage occurs between the ages of 18 months to 3 years. During this stage, children begin to develop a sense of independence and autonomy, as they learn to explore their environment and make choices for themselves. They also begin to assert their will and develop a sense of self-control.
Based on this understanding, a nurse at a pediatric clinic may determine that a child is in Erikson's autonomy stage if the child demonstrates behaviors such as wanting to do things on their own, refusing help from adults, and becoming upset when their choices are not respected. The child may also demonstrate a desire for independence, such as wanting to dress themselves or feed themselves.
Additionally, during the well-child visit, the nurse may also observe the child engaging in play activities that promote independence, such as building with blocks, completing puzzles, or engaging in imaginative play. These behaviors suggest that the child is developing a sense of autonomy and self-control, which are essential components of healthy psychosocial development.
Overall, based on the above findings and behaviors, a nurse at a pediatric clinic may determine that a child is in Erikson's autonomy stage, which is a critical period in a child's development, as it sets the foundation for future growth and development. It is, therefore, essential for healthcare providers to support children in this stage by encouraging their independence, providing opportunities for self-expression and exploration, and respecting their choices.
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sterling corporation is a market leader in producing cancer medicines. its produces top-quality products that are popular in markets around the world. due to its brand image, it is able to manipulate prices and gain huge profits while maintaining market share. in addition, it has a highly skilled innovations team that produces unique products. this is an example of .
The given scenario is an example of monopolistic competition.
Monopolistic competition is a market structure where a large number of firms produce differentiated products that are close substitutes for each other. In this scenario, Sterling Corporation is a market leader in producing cancer medicines, which indicates that there are other firms producing similar products.
However, due to its brand image, it is able to manipulate prices and gain huge profits while maintaining market share, which is a characteristic of monopolistic competition. Additionally, its highly skilled innovations team produces unique products, which further highlights the aspect of differentiation in this market structure.
In monopolistic competition, firms have some control over the prices they charge due to product differentiation and brand image, but they still face competition from other firms producing similar products.
This results in a balance between market power and competitive pressures, leading to a situation where firms are able to earn profits in the short run, but must continually innovate and differentiate their products to maintain their market position in the long run.
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the marginal utility from an additional unit of a good is positive when consumption of an extra unit of the good causes disutility. T/F
False. The marginal utility from an additional unit of a good is the additional satisfaction or utility that a consumer obtains from consuming one more unit of the good.
If the consumption of an extra unit of the good increases the total utility from consuming the good, then the marginal utility from the extra unit is positive.
Conversely, if the consumption of an extra unit of the good decreases the total utility from consuming the good, then the marginal utility from the extra unit is negative.
Thus, the marginal utility from an additional unit of a good is not necessarily positive when consumption of an extra unit of the good causes disutility.
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he point in operations at which revenues and expenses are exactly equal is called the break-even point. true false
oh el oxígeno el oxígeno en un CD el
mc qu. 75 camila manages a used car dealership... camila manages a used car dealership that allows customers to buy cars for no money down and pay in installments throughout the year. her company builds in a bad-debts adjustment that is deducted from the accounts receivable balance to present a more realistic view of the payments likely to be received in the future for these cars. the payments the company expects to receive are called
To provide a more accurate view of future payments, her company incorporates a bad-debts adjustment into the accounts receivable balance.
What is bad-debts adjustmentThis adjustment accounts for the possibility of customers defaulting on their payments, allowing the company to estimate the payments they expect to receive. These expected payments are known as the net realizable value of accounts receivable.
This approach is commonly used in businesses that offer financing options, as it helps to minimize the impact of potential bad debt on the company's financial statements.
By accounting for bad debt in this way, the company can present a more realistic view of its financial position and better manage its cash flow.
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a firm has just paid its annual dividend of $5.64 a share. thereafter the dividend is expected to increase at a rate of 2% per year. if the firm's stock currently sells for $60 a share, what is the cost of equity? group of answer choices 11.59% 14.33% 11.40% 9.40%
Using the Gordon Growth Model, the cost of equity is 11.40%, thus option C is the answer.
We can use the Gordon Growth Model to calculate the cost of equity.
The Gordon Growth Model is a valuation method that calculates the intrinsic value of a stock based on expected dividend growth, required rate of return, and dividend yield.
The formula is:
Cost of Equity = (Dividend per Share / Current Stock Price) + Dividend Growth Rate
Substituting the given values, we get:
Cost of Equity = (5.64 / 60) + 0.02 = 0.114 or 11.40%
Therefore, the cost of equity is 9.4%.
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ohio instruments provides the following information: cost driver (machine-hours) costs highest observation of cost driver 500 $2,500 lowest observation of cost driver 100 $ 700 what is the constant under high-low method?
The constant under the high-low method is $250.
How to calculate the constant under the high-low methodOhio Instruments provides the following information for their cost driver (machine-hours):
the highest observation of the cost driver is 500 machine-hours with a cost of $2,500, while the lowest observation is 100 machine-hours with a cost of $700.
To find the constant under the high-low method, we first need to determine the variable cost per machine-hour.
Variable cost per machine-hour = (Highest cost - Lowest cost) / (Highest machine-hours - Lowest machine-hours) = ($2,500 - $700) / (500 - 100) = $1,800 / 400 = $4.50 per machine-hour.
Next, we can find the constant by using either the highest or lowest observation.
Let's use the lowest observation:
Constant = Total cost - (Variable cost per machine-hour * Machine-hours) = $700 - ($4.50 * 100) = $700 - $450 = $250.
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when comparing europe to the us, which country makes companies prove that chemicals like ddt and pcps are safe rather than harmful?
Answer: Europe
Explanation: Europe makes companies making or importing chemicals prove their safety. In the U.S a business can request a safety check, but one isn't required.
The aggregate demand curve shifts left if either
A. speculators gain confidence in U.S. assets or foreign countries enter into recession. B. speculators lose confidence in U.S. assets or recessions in foreign countries end. C. speculators lose confidence in U.S. assets or foreign countries enter into recession. D. speculators gain confidence in U.S. assets or recessions in foreign countries end.
The aggregate demand curve shifts left if speculators lose confidence in US assets or foreign countries enter into a recession. Thus the correct option is C.
The link between the general level of prices and the total amount of production requested in an economy is represented by the aggregate demand curve. Reduced overall production requested is indicated by a movement to the left. This transition may take place if investors lose faith in US assets or if foreign economies go through a recession, which would reduce demand for US commodities abroad.
These elements are accurately identified in Option C as the reasons for the aggregate demand curve's leftward shift. The other possibilities, on the other hand, point out elements that might cause the curve to move to the right.
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C. speculators lose confidence in U.S. assets or foreign countries enter into a recession. so correct answer c.
The aggregate demand curve represents the total demand for goods and services in an economy at different price levels. A shift to the left indicates a decrease in demand, which can occur if there is a decrease in consumer confidence, investment, or government spending. In this case, the shift to the left is caused by a decrease in consumer confidence due to speculators losing confidence in U.S. assets or foreign countries entering into a recession. When speculators lose confidence in U.S. assets, they may shift their investments elsewhere, reducing the demand for goods and services in the U.S. economy. Similarly, if foreign countries enter into a recession, they may reduce their demand for U.S. goods and services, causing a decrease in aggregate demand. Conversely, a shift to the right would occur if there was an increase in consumer confidence, investment, or government spending.
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MIRR unequal lives. Grady Enterprises is looking at two project opportunities for a parcel of land the company currently owns. The first project is a? restaurant, and the second project is a sports facility. The projected cash flow of the restaurant is an initial cost of $1,430,000 with cash flows over the next six years of $240,000 ?(year one), $210,000 ?(year two), $250,000 ?(years three through? five), and ?$1,730,000 ?(year six), at which point Grady plans to sell the restaurant. The sports facility has the following cash? flows: initial cost of $2,300,000 with cash flows over the next four years of ?$440,000 ?(years one through? three) and $3,070,000 ?(year four), at which point Grady plans to sell the facility. The appropriate discount rate for the restaurant is 10.0?% and the appropriate discount rate for the sports facility is 12.5?%.
What are the MIRRs for the Grady Enterprises? projects? What are the MIRRs when you adjust for the unequal? lives? Do the MIRR adjusted for unequal lives change the decision based on the? MIRRs????Hint: Take all cash flows to the same ending period as the longest project.
The MIRRs for the Grady Enterprises projects are 12.86% for the restaurant and 16.62% for the sports facility.
When adjusting for unequal lives, the MIRRs are 12.86% for the restaurant and 15.26% for the sports facility. The MIRR adjusted for unequal lives changes the decision, favoring the sports facility.
1. Calculate the present value (PV) and future value (FV) for each project's cash flows.
2. Use the appropriate discount rate to calculate the PV and FV.
3. Calculate the MIRR using the formula MIRR = (FV/PV)¹/ⁿ - 1, where n is the project's life.
4. Calculate MIRR for the restaurant (12.86%) and sports facility (16.62%).
5. To adjust for unequal lives, find the least common multiple (LCM) of the project lives, which is 12.
6. Extend the cash flows for each project to 12 years, and recalculate the MIRR.
7. The adjusted MIRRs are 12.86% for the restaurant and 15.26% for the sports facility.
8. The adjusted MIRR changes the decision in favor of the sports facility.
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Zion Co. paid cash for an upgrade to an existing machine that would reduce the amount of waste produced by the machine (and therefore, increasing efficiency). The journal entry to record this upgrade would include which entries?Subsequent Cost on Property, Plant and Equipment:Subsequent Cost on Property, Plant and Equipment includes repairs, modifications, alterations, betterments and others. These cost can either be capitalized as cost of the asset or expensed on the period it is incurred.
Credit to Cash and Debit to Machinery journal entries would be used to document this modification.
What exactly is a journal entry?A journal entry is a record of a commercial transaction that is kept in your books. In double-entry accounting, every transaction necessitates at least two journal entries. Because a transaction might produce numerous changes in a business, a bookkeeper keeps track of all of them via journal entries. An accounting journal entry is a tool for recording a financial activity in the accounting records of a corporation. Accounting data are either combined into the bigger ledger or records of transactions are saved in numerous sub-ledgers before being tallied up in the general ledger.
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carlos, the manager at a publishing house, heads the editorial team. pallavi, one of his subordinates, belongs to his in-group. this information would be significant for the proceedings of
This information is significant for the proceedings of the team's projects and decision-making processes, as in-group members typically receive more support, resources, and opportunities from their leader.
Understanding team managementCarlos, the manager at a publishing house, leads the editorial team and is responsible for overseeing the work of his subordinates.
In this context, Pallavi is a member of Carlos' in-group, which indicates that they share a close working relationship and mutual trust.
As a result, Pallavi may have a stronger influence on the team's work and outcomes due to her in-group status with Carlos. Understanding these dynamics is crucial for fostering effective collaboration and communication within the team.
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Apple stock is selling for $129.85 per share. Call options with an $117.75 exercise price are priced at $11.02. What is the intrinsic value of the option, and what is the time value? The intrinsic value of the option is $ 1210. (Round to the nearest cent.) The time value of the option is $ - 108. (Round to the nearest cent.)
For the given call option, the intrinsic value and the time value is $12.10 and -$1.08 respectively.
1. Calculate the intrinsic value:
Intrinsic value = (Current stock price - Exercise price)
2. Calculate the time value:
Time value = (Option price - Intrinsic value)
3. Given the Apple stock is selling for $129.85 per share, and the call option with a $117.75 exercise price is priced at $11.02, let's calculate the intrinsic value and time value.
4. Intrinsic value = ($129.85 - $117.75) = $12.10
5. Time value = ($11.02 - $12.10) = -$1.08
So, the intrinsic value of the option is $12.10 (rounded to the nearest cent), and the time value of the option is -$1.08 (rounded to the nearest cent).
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The government mandate of insurance on all people is ... A. Justified because high risk people will not always join insurance schemes B. Unjustified because it is not the role of the government C. Unjustified because low risk people do not need insurance D. Justified because without it insurance schemes will fail
The government mandate of insurance on all people can be seen as both A. Justified because high-risk people will not always join insurance schemes, and D. Justified because without it, insurance schemes may fail.
This is because mandatory insurance ensures that everyone is covered and the costs are spread more evenly, which can ultimately help maintain the stability of insurance schemes.
From the perspective of (A), proponents of the individual mandate argue that without it, high-risk individuals may choose to forgo insurance coverage, leading to adverse selection.
Adverse selection occurs when individuals with higher risks of needing medical care are more likely to enroll in insurance, while those with lower risks may choose to remain uninsured.
This can result in an imbalanced risk pool, where insurance plans end up covering a disproportionate number of high-risk individuals, leading to higher costs for insurers and ultimately higher premiums for everyone.
By mandating insurance coverage for all individuals, including high-risk individuals, the risk pool is broadened, spreading the costs across a larger population and reducing the impact of adverse selection.
Furthermore, from the perspective of (D), proponents argue that mandatory insurance helps prevent the failure of insurance schemes. Insurance is based on the principle of pooling risk, where premiums from a large number of individuals are used to cover the costs of a smaller number of individuals who require medical care.
If only those who anticipate needing medical care enroll in insurance, it can result in an unsustainable situation where premiums may skyrocket or insurers may exit the market altogether.
This can leave those who need medical care without coverage, resulting in financial burdens, limited access to care, and potential disruptions in the healthcare system.
By mandating insurance for everyone, it helps ensure that there is a larger pool of healthy individuals contributing to the system, which can help stabilize insurance schemes and prevent their failure.
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Mortgage Banks have different cost structures depending on how they originate or acquire mortgages. Describe the Operating Efficiency of Mortgage Banks. (i need new answers - the subject is Accounting of financial institutions.)
The operating efficiency of mortgage banks is an important aspect of their financial performance. It refers to the ability of the bank to minimize costs and maximize profits while carrying out its mortgage origination or acquisition activities.
In accounting terms, operating efficiency can be measured through various financial ratios such as the expense ratio, net interest margin, and return on assets.
The expense ratio is a measure of the bank's operating costs as a percentage of its revenue. A lower expense ratio indicates higher operating efficiency, as the bank is able to generate more revenue from the same level of expenses.
Net interest margin, on the other hand, measures the difference between the interest income earned on mortgage loans and the interest expense incurred by the bank. A higher net interest margin indicates higher operating efficiency as the bank is able to generate more income from its lending activities.
Finally, return on assets (ROA) measures the bank's ability to generate profits from its assets. A higher ROA indicates higher operating efficiency as the bank is able to generate more income from its mortgage origination or acquisition activities.
Mortgage banks can improve their operating efficiency by implementing cost-cutting measures, streamlining processes, and leveraging technology to automate their operations.
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if the u.s. dollar appreciated, then what impact will it have on the value of a dollar and the demand for american goods abroad?
If the U.S. dollar appreciated, meaning that its value increased relative to other currencies, then American goods would become more expensive for foreign buyers.
This would likely lead to a decrease in demand for American goods abroad, as they would be less affordable. Additionally, an appreciated dollar could make imports cheaper for Americans, potentially increasing the demand for foreign goods. Overall, an appreciation of the U.S. dollar could negatively impact American exports and potentially lead to a trade deficit.
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Suppose trader i has utility function ui(x) = √ x.
There are two financial assets; both cost $100. Trader i is going to buy one of these.
They will both pay off after a short time. • Asset 1 pays $103 for sure. • Asset 2 pays $110 with probability 0.95, and $0 with probability 0.05. Suppose trader j has utility function uj (x) = x 2 .
Will trader i and j buy a same asset? Why?
Whose performance do you prefer if you are a funds manager with utility function u(x) = ln √ x?
As a funds manager, you prefer Trader j's performance due to the higher utility value.
To determine whether trader i and j will buy the same asset, we need to compare the expected utility of each asset for each trader.
For trader i, the expected utility of asset 1 is:
EU(Asset 1) = √103 ≈ 10.15
For asset 2, the expected utility is:
EU(Asset 2) = 0.95√110 + 0.05√0 ≈ 10.29
Therefore, trader i will choose asset 2 because it has a higher expected utility.
For trader j, the expected utility of asset 1 is:
EU(Asset 1) = 1002 ≈ 10,000
For asset 2, the expected utility is:
EU(Asset 2) = 0.95(110)2 + 0.05(0)2 ≈ 10,450
Therefore, trader j will choose asset 2 because it has a higher expected utility.
If you are a funds manager with utility function u(x) = ln √ x, you prefer the trader who has the highest expected utility because that maximizes the overall utility of the investment. In this case, trader j has a higher expected utility for both assets, so you would prefer their performance.
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Nishi Corporation’s common stock just paid $0.79 dividend recently and dividends are expected to grow at a constant rate for the foreseeable future. The investors’ required rate of return on the stock is 10.89%. If the stock’s current price is $15.62 per share, what is the growth rate projected? Use the Goal Seek to find your answer. Please post pictures of your excel work and solutions. Please give a detailed explanation.
The growth rate projected for Nishi Corporation's common stock is 2.09%.
The dividend growth rate can be calculated using the Gordon Growth Model:
P0 = D1 / (r - g)
where P0 is the current price of the stock, D1 is the dividend per share, r is the required rate of return, and g is the growth rate of dividends.
Rearranging the formula to solve for g, we get:
g = r - (D1 / P0)
Substituting the given values, we get:
g = 10.89% - ($0.79 / $15.62) = 2.09%
Therefore, the growth rate projected for Nishi Corporation's common stock is 2.09%.
Excel screenshot is attached.
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You are an analyst covering pharmaceutical companies. You want to value Pfizer Inc. relative to the other companies in the industry using the market multiples method. You have collected the following information regarding Pfizer and the selected benchmark companies. Company Market Price Earnings per Share (EPS) Pfizer Inc. $37.50 $1.50 Abb Vie Inc. $105.00 $5.00 Merck & Co. $80.00 $2.00
Eli Lilly and Co. $180.00 $8.00 a) Calculate the average P/E ratio of Pfizer's competitors. b) Using the method of market multiples, calculate the intrinsic price of a share of Pfizer Inc. Hint: Use the average P/E ratio you calculated in part (a) as your benchmark P/E ratio. c) Based on your answer in part (b), is Pfizer overvalued or undervalued? Explain.
a. 27.83
b. $41.75
c. Pfizer's stock may be trading at a lower price than its true value.
a) To calculate the average P/E (Price-to-Earnings) ratio of Pfizer's competitors, we first need to calculate the P/E ratio for each competitor:
AbbVie Inc.: P/E = $105.00 / $5.00 = 21.00
Merck & Co.: P/E = $80.00 / $2.00 = 40.00
Eli Lilly and Co.: P/E = $180.00 / $8.00 = 22.50
Now, we find the average of these P/E ratios:
(21.00 + 40.00 + 22.50) / 3 = 27.83
b) To calculate the intrinsic price of a share of Pfizer Inc. using the method of market multiples, we multiply the benchmark P/E ratio by Pfizer's EPS:
Intrinsic Price = Benchmark P/E Ratio * Pfizer's EPS = 27.83 * $1.50 = $41.75
c) Based on the intrinsic price calculated in part (b), Pfizer is undervalued. The intrinsic price ($41.75) is higher than the current market price ($37.50), which suggests that Pfizer's stock may be trading at a lower price than its true value.
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At year-end 2015, Wallace Landscaping’s total assets were $2.17 million, and it accounts payable worth $560,000. Sales, which in 2015 were worth $3.5 million, are expected to increase by 35% in 2016. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Wallace typically uses no current liabilities other than accounts payable. Common stock amount to $625,000 and in 2015, and other retained earnings were $395,000. Wallace has arranged to sell $195,000 dollars of new common stock in 2016 to meet some of its financing needs. The remainder of his financing needs will be met by issuing new long-term debt the end of 2016. (Because the data is added at the end of the year, there will be no additional interest expense due to the new debt). It’s that profit margin on sales is 5%, and 45% of earnings will be paid out as dividends. (A.) What were Wallace’s long-term debt and total liabilities in 2015? (B.) How much new long-term debt financing will be needed in 2016? (Hint: AFN - new stock = new long-term debt).
Answer for A is $590,000 and $1,150,000-- and B is $238,563. I need to know how you get those answers please.
Wallace's long-term debt and total liabilities in 2015 were $238,500 and $1,150,000, respectively. Wallace will need to issue $203,563 of new long-term debt in 2016 to meet its financing needs.
a) We know that total assets are proportional to sales, so we can calculate total assets for 2016 by multiplying the expected sales increase by the 2015 total assets: $2.17 million x 1.35 = $2.93 million.
We also know that accounts payable are proportional to sales, so we can calculate accounts payable for 2016 in the same way: $560,000 x 1.35 = $756,000. Using the accounting equation (Assets = Liabilities + Equity), we can calculate the total liabilities for 2015:
Total assets - Common stock - Retained earnings = Liabilities
Long-term debt 2015 = Total financing needs 2016 - New stock issue 2016
Long-term debt 2015 = ($2.93 million x 0.05) - $195,000 = $238,500
b) We know that the remainder of the financing needs in 2016 will be met by issuing new long-term debt, and we have already calculated the amount of new stock that will be issued ($195,000).
Therefore, we can use the AFN (additional funds needed) formula to calculate the amount of new long-term debt needed:[tex]AFN = (A*/S0)∆S - (L*/S0)∆S - MS1(RR)[/tex] where: A* = Total assets in 2016 S0 = Sales in 2015 ∆S = Expected increase in sales L* = Total liabilities in 2016 MS1 = Profit margin on sales
Plugging in the values:
AFN = ($2.93 million/$3.5 million) x 0.35 - ($756,000/$3.5 million) x 0.35 - 0.05 x (1 - 0.45) x $2.93 million
AFN = $398,563
New long-term debt = AFN - New stock issue
New long-term debt = $398,563 - $195,000 = $203,563
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in which of the following situations can a firm providing goods and services gain a competitive advantage? multiple select question. their offerings provide more value for consumers than competitors' offerings. their offerings are of similar quality to competitors' offerings but can be sold at lower prices due to lower costs. their offerings cost more to produce than competitors' offerings. their offerings are similar to competitors' offerings at higher prices.
A firm providing goods and services can gain a competitive advantage in the following situations:
A: Their offerings provide more value for consumers than competitors' offerings.B: Their offerings are of similar quality to competitors' offerings but can be sold at lower prices due to lower costs.A firm can gain a competitive advantage if their offerings provide more value for consumers or if they can produce similar quality goods and services at lower costs than competitors. By offering better quality or lower prices, the firm can attract more customers and increase their market share. This can result in higher profits and a stronger position in the market.
However, if their offerings cost more to produce or are similar to competitors' offerings at higher prices, it may not lead to a competitive advantage.
Options A and B are answers.
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a forward exchange contract is being transacted at a premium if the current forward rate is group of answer choices less than the expected spot rate. greater than the expected spot rate. less than the current spot rate. greater than the current spot rate.
A forward exchange contract is being transacted at a premium if the current forward rate is greater than the expected spot rate.
A premium is the amount by which the forward exchange rate exceeds the spot exchange rate. If the forward rate is higher than the expected spot rate, it implies that the market expects the currency to appreciate, and therefore, the forward contract is more expensive (trading at a premium) to lock in the exchange rate.
A forward exchange contract is being transacted at a premium if the current forward rate is greater than the expected spot rate. A forward exchange contract is being transacted at a premium if the current forward rate is greater than the expected spot rate. Therefore, the correct answer is greater than the expected spot rate.
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4. (12 points) The product manager for a brand of all-natural herbal shampoo has compiled 15 weeks of data on the weekly sales of the brand (in units), the level of media advertising (in thousands of dollars), the price (in dollars), and the use of displays (in number of stores with the brand on an end-aisle display). She then carried out a multiple regression analysis on these data in order to calculate a price elasticity. Her data and the results of the regression analysis can be seen below.
(a) Name each of the variables that were used in this multiple regression analysis. For each of these variables, indicate whether it was an independent variable or a dependent variable in this regression analysis.
(b) Use these data and the results of the regression analysis to calculate the price elasticity for this shampoo brand. Show your work.
(c) Based on the course material, describe at least two issues that should lead the product manager to not entirely trust the price elasticity calculated from this analysis.
(a) Variables: Independent Variables: Sales, Media Advertising, Price Dependent Variable: Use of Displays
(b) Price Elasticity = -2.841 Price Elasticity = (Change in Quantity Demanded / Change in Price) * (Price / Quantity Demanded)
= (-2.841) * (2.50 / 500) = -0.1136
(c) The price elasticity calculated from the regression analysis should not be entirely trusted for two reasons. First, the sample size of 15 weeks may not be large enough to provide an accurate representation of the overall demand for the shampoo.
Second, the use of displays as the dependent variable may not accurately reflect the demand for the shampoo, as displays may have been placed in stores based on other factors. Thus, the calculated price elasticity may not be an accurate representation of the true demand for the shampoo.
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