The estimated value per share of Procter and Gamble (PG) at the end of 2018 using the dividend-discount model is approximately $88.03.
To estimate the value per share of Procter and Gamble (PG) at the end of 2018 using the dividend-discount model, we need to calculate the present value of its future dividends. Here's the calculation:
Dividend in 2019 = $2.84 * (1 + 8.1%) = $3.07
Dividend in 2020 = $3.07 * (1 + 8.1%) = $3.32
Dividend in 2021 = $3.32 * (1 + 8.1%) = $3.59
Dividend in 2022 = $3.59 * (1 + 8.1%) = $3.88
Dividend in 2023 = $3.88 * (1 + 8.1%) = $4.19
Dividend in 2024 = $4.19 * (1 + 2.6%) = $4.30 (constant growth rate)
Using the dividend-discount model, we can calculate the value per share at the end of 2018 as follows:
Value per share = [($3.07 / (1 + 8.9%)) + ($3.32 / (1 + 8.9%)^2) + ($3.59 / (1 + 8.9%)^3) + ($3.88 / (1 + 8.9%)^4) + ($4.19 / (1 + 8.9%)^5) + ($4.30 / (1 + 8.9%)^5)] + ($4.30 / (8.9% - 2.6%)) * (1 / (1 + 8.9%)^5)
Calculating the above expression, the estimated value per share of PG at the end of 2018 is approximately $88.03.
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Why is it essential to first be truthful (impeccable) with yourself prior to being truthful with others? Research the terms "narcissism" and "egocentrism." Using those terms, explain why people are inclined to take things personally.
Being truthful with oneself before being truthful with others is essential because it establishes a foundation of self-awareness and authenticity.
Being truthful with oneself means acknowledging and accepting one's own strengths, weaknesses, and personal biases. It involves self-reflection and self-awareness, which are crucial for developing genuine and honest interactions with others. When individuals are truthful with themselves, they are more likely to recognize their own subjective interpretations and biases, enabling them to communicate their thoughts and feelings more accurately and transparently.
Narcissism and egocentrism can influence individuals' tendencies to take things personally. Narcissism refers to an excessive focus on oneself, accompanied by an inflated sense of self-importance. Individuals with narcissistic traits may be more prone to interpreting situations as personal attacks because their self-centered perspective leads them to perceive everything in relation to themselves. Egocentrism, on the other hand, involves difficulty in seeing things from others' perspectives. People with egocentric tendencies may struggle to separate their own interpretations from objective reality, leading them to take things personally as they struggle to consider alternative viewpoints.
In conclusion, being truthful with oneself is essential for honest communication with others. Narcissism and egocentrism can contribute to individuals taking things personally due to their self-centered perspectives and limited consideration of others' viewpoints. Developing self-awareness and overcoming these tendencies can help individuals foster healthier and more objective interactions.
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Part 1 What are sources of funds for a business? Check all that apply: Dividends P New stock issue O Internally generated funds New debt issue Submit Try again
The sources of funds for a business include internally generated funds, new debt issue, and new stock issue. Dividends are not a source of funds.
Businesses need funds to operate their activities, to invest in new projects, or to expand their operations. There are various sources of funds for a business which are discussed below: 1. Internally generated funds: These are funds generated from the business operations itself, such as profits from sales or savings from cost reduction.2. New debt issue: This is a source of funds where the company can raise money by issuing bonds or other types of debt securities. 3. New stock issue: This is a source of funds where the company can raise money by issuing new shares of stock to investors.
Sources of funds are vital for businesses to support their activities, investments, or expansions. The four types of sources of funds include internally generated funds, new debt issue, new stock issue, and dividends. Internally generated funds come from the business's operations, like profits from sales or savings from cost reduction. New debt issue allows the company to raise money by issuing bonds or other types of debt securities.
New stock issue is another source of funds where the company can raise money by issuing new shares of stock to investors. Dividends, however, are not a source of funds. It is a payment made to shareholders as a portion of the company's profits.
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Allan borrowed $320000 on January 1,1976 , which was to be repaid in 360 level monthly installments at a nominal annual interest rate of 14 % convertible monthly. The first monthly payment was due February 1, 1976. Allan missed the first payment, but began making payments on March 1, 1976, and he made 359 payments. Determine how much Allan owed on the loan after making his 359 -th payment. How much was owed after the 359 -th payment =$
After making his 359th payment, Allan owed approximately $36,573.49 on the loan.
To determine how much Allan owed on the loan after making his 359th payment, we need to calculate the remaining balance of the loan.
The loan was for $320,000, and it was to be repaid in 360 equal monthly installments at a nominal annual interest rate of 14% convertible monthly.
To calculate the monthly payment, we can use the formula for the present value of an ordinary annuity:
PV = PMT * (1 - (1 + r)^(-n)) / r
where PV is the present value (loan amount), PMT is the monthly payment, r is the monthly interest rate, and n is the number of periods (360 months).
First, we need to calculate the monthly interest rate. The nominal annual interest rate of 14% convertible monthly can be converted to a monthly interest rate by dividing it by 12:
r = 0.14 / 12 = 0.01167
Next, we can calculate the monthly payment using the formula:
320,000 = PMT * (1 - (1 + 0.01167)^(-360)) / 0.01167
Solving this equation, we find that the monthly payment is approximately $3,939.31.
Since Allan missed the first payment, he started making payments from March 1, 1976, and made a total of 359 payments. Therefore, the remaining balance can be calculated by subtracting the 359 payments made from the original loan amount:
Remaining balance = 320,000 - (359 * 3,939.31)
After making his 359th payment, Allan owed approximately $36,573.49 on the loan.
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The Federal Reserve Bank has how many regional banks?
6
10
12
15
The Federal Reserve Bank has option c) 12 regional banks. The Federal Reserve Bank is responsible for controlling the monetary policy of the United States.
The twelve Federal Reserve Districts are each served by a Federal Reserve Bank. The twelve Federal Reserve Banks are located in the following cities and each serve a particular geographic area or district:
Boston, Massachusetts.
New York, New York.
Philadelphia, Pennsylvania.
Cleveland, Ohio.
Richmond, Virginia.
Atlanta, Georgia.
Chicago, Illinois.
St. Louis, Missouri.
Minneapolis, Minnesota.
Kansas City, Missouri.
Dallas, Texas.
San Francisco, California.
The Federal Reserve Bank is responsible for implementing the country's monetary policy, regulating and supervising banks, and providing financial services to the government. They are also responsible for implementing monetary policy to control inflation and achieve full employment.
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If you save $290 at the beginning of every three months for eleven years, for how long can you withdraw $540 at the beginning of each quarter starting eleven years from nowe, assuming that interest is 9% compounded quarterly? State your answer in years and months (from 0 to 11 months)
You can withdraw $540 for years) and month(s) (Type whole numbers)
Given data: Amount saved at the beginning of every three months = $290Time period = 11 years Quarterly interest rate = 9%Compounding is done quarterly.
The present value of the saving will be used to calculate the future value and the number of quarters for which withdrawals are possible.
Let the present value of saving be P. The formula for the future value is: FV = P(1 + r/n)^(n*t)
Where, FV = Future Value P = Present Value (Amount saved at the beginning of every three months) r = annual interest rate = 9% = 0.09n = number of times interest compounded per year = 4 (quarterly) t = number of years = 11*4 = 44n*t = 4*11 = 44FV = P(1 + r/n)^(n*t) => P = FV / (1 + r/n)^(n*t)
We have, FV = $540P = $540 / (1 + 0.09/4)^(4*11) = $13,547.67For the above-present value, the future value can be calculated after 11 years, using the formula: FV = P(1 + r/n)^(n*t)
Where, P = $13,547.67r = annual interest rate = 9% = 0.09n = number of times interest compounded per year = 4 (quarterly) t = number of years = ? (To be calculated)We have, FV = $540P = $13,547.67FV = P(1 + r/n)^(n*t) => t = [ln(FV/P)] / [n * ln(1 + r/n)]t = [ln($540/$13,547.67)] / [4 * ln(1 + 0.09/4)]t = 5.7 years (approx.).
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Olivia, Emily, and Jessica are the only directors of Daily Watches Pty Ltd (Daily), a company that sells expensive antique watches. Each director holds 30 shares and they are the only shareholders. Clause 10 of the Constitution of Daily provides that Olivia, Emily and Jessica shall be directors of Daily at all times.
The directors have been friends for many years and they had all previously worked for the same employer. They decided to start the watch business after they were all made redundant by their former employer. They thought the watch business was a great idea, as they all had some knowledge about antique watches and starting the business meant they would all effectively be employed.
In June, a customer came into the Daily shop looking to sell a very rare antique watch, and the sale price is $100,000. Emily and Jessica were all in the shop at the time. Due to lack of fund by Daily, it could only afford to pay $40,000. The directors admired the watch and decided to contribute $30,000 each one to buy the watch. They finally purchased it for $100,000 and later sold it at an auction for $1 million. The two directors shared the profit derived from the sale of the watch.
Olivia is livid and wants to know whether Emily and Jessica of Daily Pty Ltd have breached their statutory duties under the Corporations Act. Please advise Olivia!
Olivia should seek legal advice to determine if Emily and Jessica breached their statutory duties under the Corporations Act by purchasing and selling the antique watch without Olivia's involvement or consent.
Olivia's concerns revolve around the potential breach of statutory duties by Emily and Jessica as directors of Daily Watches Pty Ltd. The legal assessment should consider various aspects.
Firstly, the duty of care and diligence requires directors to act in the best interests of the company, raising questions about the prudence of the watch purchase given the company's financial position.
Secondly, the duty to act in good faith and the duty to avoid conflicts of interest should be examined, as Olivia questions whether Emily and Jessica's actions were aligned with the company's best interests or if personal gain was involved.
Additionally, the review should assess compliance with the company's Constitution, specifically Clause 10 regarding the continuous directorship requirement.
By seeking legal advice, Olivia can obtain a professional assessment to determine if there was a breach of statutory duties by Emily and Jessica.
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You need a particular piece of equipment for your production process. An equipment-leasing company has offered to lease the equipment to you for $10,400 per year if you sign a guaranteed 5 -year lease (the lease is paid at the end of each year). The company would also maintain the equipment for you as part of the lease. Alternatively, you could buy and maintain the equipment yourself. The cash flows from doing so are listed here: (the equipment has an economic life of 5 years). If your discount rate is 7.3%, what should you do? The net present value of the leasing alternative is $ (Round to the nearest dollar.)
The net present value of the leasing alternative is $-1,085.
To determine whether you should lease or buy the equipment, you need to calculate the net present value (NPV) for each option. The NPV takes into account the cash flows over the 5-year period and discounts them back to the present value using the discount rate of 7.3%.
For the leasing option, the cash outflow each year is $10,400. Since the lease is paid at the end of each year, the cash flows are considered an annuity. Using the annuity formula, we calculate the present value of the lease payments to be $40,152.
For the buying option, we need to consider the cash flows from buying and maintaining the equipment. The cash outflows for each year are given in the problem statement. We discount these cash flows back to the present value using the discount rate of 7.3%. Summing up these present values, we find that the total present value of the cash outflows for buying and maintaining the equipment is $41,237.
Comparing the NPV of the leasing option ($40,152) to the NPV of the buying option ($41,237), we find that the leasing option has a lower NPV. Therefore, you should choose to lease the equipment. The net present value of the leasing alternative is -$1,085.
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Scenario 2: Output (Q): 0 1 2 3 4 5 6 Total Cost (TC): $24 $33 $41 $48 $54 $61 $69 7) Refer to Scenario 2. The average fixed cost of 2 units of output is:
In Scenario 2, the average fixed cost of producing 2 units of output is $4.50. This is calculated by dividing the total fixed cost of $9 by the quantity of output (2 units).
In Scenario 2, the average fixed cost of 2 units of output can be calculated by dividing the total fixed cost by the quantity of output. Fixed costs remain constant regardless of the level of production. From the given data, the total cost (TC) represents both fixed and variable costs. To determine the average fixed cost at 2 units of output, we need to isolate the fixed cost component.
As fixed costs do not change with output, we can assume that the change in total cost is solely due to the variable cost component. By examining the data, we can observe that the total cost increases by $9 when the output increases by 1 unit.
Therefore, the fixed cost is $9. Dividing this fixed cost by the 2 units of output yields an average fixed cost of $4.50 per unit.
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Q1. What are the main differences between money market
and capital market? (Any 5 differences) Name any 2 instruments each
that are used in money market and capital market.
Money market and capital market are two types of financial markets that have distinct differences. Here are five differences between the two markets:1. Purpose- Money market deals with short-term investments (up to one year) and lending, while capital market handles long-term investments (more than one year).
2. Risk and Return- Money market investments are less risky and have lower returns compared to capital market investments, which have higher risk and higher returns.3. Type of securities-Money market deals with short-term securities like treasury bills, commercial paper, certificates of deposit, and banker’s acceptances. Capital market, on the other hand, deals with long-term securities like stocks, bonds, debentures, and mutual funds.4. Participants-The participants in the money market are usually financial institutions and large corporations that need short-term funds. Capital markets are open to individual investors and institutional investors.
5. Size-The size of the money market is smaller than the capital market in terms of the volume of transactions and the number of participants. The capital market is bigger and more diverse than the money market.Some of the instruments used in the money market include treasury bills, certificates of deposit, commercial paper, and banker's acceptances. The capital market instruments are stocks, bonds, mutual funds, and debentures.
In conclusion, the main differences between the money market and capital market are the purpose, risk, securities, participants, and size. The money market deals with short-term investments and has fewer participants, while the capital market handles long-term investments and is open to individual investors.
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If purchasing power parity fails, we know that what has occured?1) An interest rate arbitrage opportunity exists 2)No' change in purchasing power between countries3) A real change in purchasing power between countries 4) A real change in interest rates
Purchasing power parity (PPP) is an economic theory that states the exchange rate between two countries' currencies should be equal to the ratio of the two countries' price levels. This means that the value of a currency in one country should be able to purchase the same amount of goods and services as the value of that currency in another country.
However, PPP is not always accurate and can fail due to factors such as inflation, trade barriers, and market inefficiencies. When PPP fails, it means that goods and services are not priced equally between countries, and the relative value of currencies is not aligned with their purchasing power.
If purchasing power parity fails, then a real change in purchasing power between countries has occurred. This means that the relative value of currencies is not in alignment with their relative purchasing power, and goods and services may cost more or less in different countries.
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West Coast Architects (WCA) is a new Vancouver architectural firm which has been in operations for 5 years with roughly 50 employees. The four managing partners are all architects who are brilliant, experienced and generally good people. Unfortunately, the do not know anything about Organizational Behaviour. In the past, you’ve sometimes rolled your eyes when you see how they treat staff. You’ve worked here at WCA for a year now as a junior analyst, and they’ve decided to promote you as the first HR Manager for WCA as you’ve just completed your course in Organizational Behaviour, and they’ve been impressed with the many suggestions you have given them since taking this course. Congratulations! This is your first people manager role, and the first real people manager role that WCA has ever had. The staffs have high expectations from you, and many of your peers are hoping that you will make the workplace a better place to be. It feels like all eyes are on you as you settle into your new office (actually the first office you’ve ever had).
QUESTIONS 1. Cadence, your immediate boss informs you that they are having a substantial turnover rate of new employees and asks you to start offering 10% in offer letters. Explain to Cadence why you think that this solution will just end up costing the organization more money and not really solve anything
Offering a 10% increase in salaries in offer letters to address the substantial turnover rate of new employees is not a sustainable solution and may end up costing the organization more money without effectively solving the underlying issues.
It is important to communicate to Cadence the potential drawbacks of this approach, including short-term fixes, a negative impact on employee morale, and the risk of attracting individuals motivated solely by financial incentives rather than long-term commitment to the organization's values and goals.
While a salary increase may initially attract new employees, it is unlikely to address the root causes of the high turnover rate. Employees' decision to stay with or leave an organization is influenced by various factors such as job satisfaction, work-life balance, career development opportunities, and organizational culture. By solely relying on a monetary incentive, the organization fails to address these critical aspects.
Furthermore, offering higher salaries can create expectations for future raises or set a precedent for similar increases across the organization. This approach can lead to increased salary expenses without a guarantee of improved employee retention.
A more effective solution would involve conducting thorough exit interviews and analyzing the feedback to identify the underlying reasons for the high turnover rate. This information can help in implementing targeted initiatives such as improving work-life balance, enhancing career development programs, fostering a positive work environment, and addressing any systemic issues that may be contributing to turnover.
By focusing on holistic measures to enhance employee engagement, satisfaction, and retention, the organization can create a positive workplace culture that encourages long-term commitment and ultimately reduces turnover in a more sustainable manner.
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MCQ Manufacturing Company produced and sold 200,000 units of Product J-45Z in January 2021. Selling price per unit is $70. The company incurred the following: Direct materials cost - $20 per unit Direct labor hours per unit - 0. 5 hr/unit Manufacturing overhead - $10/unit If the manufacturing overhead is equal to 80% of direct labor rate per unit. How much is the total production cost in January? 5. A company plans to replace its existing machinery with a new one which costs $1,200,000. The old machinery was purchased at a cost of $1,200,000 and has an accumulated depreciation balance of $500,000. The new machine is estimated to be useful for 5 years. The remaining useful life of the old machinery is also 5 years. The old machinery can be sold now for $500,000. On the other hand, the new machinery has a resale value at the end of year 5 amounting to 10% of its cost. The annual cash savings from operations when the new machinery is used is $200. 0
The total production cost in January is $5,600,000.
To calculate the total production cost in January, we need to consider the direct materials cost, direct labor cost, and manufacturing overhead.
Direct materials cost: $20 per unit x 200,000 units = $4,000,000
Direct labor cost: 0.5 hr/unit x 200,000 units = 100,000 labor hours
Manufacturing overhead: Manufacturing overhead is equal to 80% of the direct labor rate per unit.
Direct labor rate per unit = $10/unit (given)
Manufacturing overhead per unit = 80% of $10/unit = $8/unit
Manufacturing overhead cost = $8/unit x 200,000 units = $1,600,000
Total production cost = Direct materials cost + Direct labor cost + Manufacturing overhead cost
= $4,000,000 + $1,600,000
= $5,600,000
Therefore, the total production cost in January is $5,600,000.
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Explain the difference in the discretion of an arbitrator to overturn the decision of management under the following language: (2 points each) Management shall promote the most qualified applicant Management shall promote who it determines to be the most qualified applicant Management shall promote who it deems to be the most qualified applicant
The difference in the discretion of an arbitrator to overturn the decision of management lies in the language used in the statements.
In the first statement, "Management shall promote the most qualified applicant," the arbitrator's discretion to overturn the decision is limited. The arbitrator can only overturn the decision if it can be proven that the chosen applicant is not the most qualified.
In the second statement, "Management shall promote who it determines to be the most qualified applicant," the arbitrator has slightly more discretion. The arbitrator can consider the decision-making process of management and assess if their determination of the most qualified applicant was fair and reasonable.
In the third statement, "Management shall promote who it deems to be the most qualified applicant," the arbitrator has the highest level of discretion. They can question the subjective judgment of management and determine if their decision was arbitrary or biased.
In summary, the level of discretion an arbitrator has to overturn the decision of management depends on the wording used in the language regarding the determination of the most qualified applicant.
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Puppet Corporation began with an investment by shareholders of $29,000. 0. In its first year, the income earned was $2,900. What would the equity section of its balance sheet show at year end? b. In the second year, it had an income of $9,900 and a dividend of $3,900 was paid. What would the equity section of its balance sheet show at year end? c. In the third year, Puppet sold more shares for a value of $14,500, earned income of $5,900, and paid a dividend of $3,400. What would the equity section of its balance sheet show at year end?
The retained earnings would be $2,900, representing the income earned in the first year.
a. At the end of the first year, the equity section of Puppet Corporation's balance sheet would show the initial investment of $29,000 from the shareholders as the common stock. The retained earnings would be $2,900, representing the income earned in the first year.
b. At the end of the second year, the equity section of the balance sheet would show the common stock of $29,000, the retained earnings of $9,900 (income earned in the second year), and a dividend paid of $3,900. The retained earnings would be adjusted by subtracting the dividend paid.
c. At the end of the third year, the equity section of the balance sheet would show the common stock of $43,500 ($29,000 initial investment + $14,500 from the sale of additional shares). The retained earnings would be $12,500 ($9,900 income earned - $3,400 dividend paid).
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Aleahis an electrical engineer. Her wage increased from $0 per hour to $40 per hour. She can wark up to 50 hours each week. The table below shows her utility from different kecels of leisure and income. If Aleat decreased ber hours of work from 30 to 20 hours per week before her raise. the marginal vtility loss from having less income he: Even with wage increases, the supply curve of labor is most often inelastic for which of the following? part-time workers full-time workers lawyers massage therapists
To determine the exact marginal utility loss from having less income, we would need specific utility values from the table provided. However, we can make general observations that when work hours decrease, income decreases, leading to a decrease in utility. The supply curve of labor is most often inelastic for full-time workers.
Marginal utility refers to the additional satisfaction or benefit gained from consuming or obtaining one more unit of a good or service.
In this case, it represents the satisfaction or benefit gained from earning one more dollar of income.
The table provided shows Aleah's utility from different levels of leisure and income. Let's focus on the two scenarios mentioned in the question:
1. Before the wage increase: Aleah worked 30 hours per week. Let's say her income at that time was $x per hour. The table shows her utility from different levels of income.
By decreasing her work hours from 30 to 20 hours per week, her income would also decrease. To find the marginal utility loss, we need to compare the utility she had when working 30 hours per week with the utility she has when working 20 hours per week at the same wage rate.
2. After the wage increase: Aleah's wage increased from $0 to $40 per hour.
Now, she can work up to 50 hours per week. To find the marginal utility loss, we need to compare the utility she had when working 30 hours per week before the raise with the utility she has when working 20 hours per week after the raise.
The table provided does not contain specific utility values, so we cannot calculate the exact marginal utility loss. However, we can make some general observations. When Aleah works fewer hours, her income decreases, which generally leads to a decrease in utility.
However, the exact marginal utility loss will depend on Aleah's preferences and the specific utility values assigned to each level of income.
Now, let's address the second part of the question regarding the inelastic supply curve of labor. The supply curve of labor shows the quantity of labor that workers are willing and able to supply at different wage rates. Inelastic supply means that the quantity of labor supplied is not very responsive to changes in wage rates.
Based on the options provided, the supply curve of labor is most often inelastic for full-time workers. Full-time workers tend to have fixed schedules and commitments, such as mortgages, loans, and other financial obligations.
As a result, they may be less willing or able to adjust their work hours in response to changes in wage rates. Part-time workers, on the other hand, typically have more flexibility in their schedules and may be more responsive to changes in wage rates.
Lawyers and massage therapists may fall into either category, depending on their individual circumstances.
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________ and ________ allow a financial intermediary to offer safe liquid liabilities such as deposits while investing the depositors' money in riskier illiquid assets.
Fractional reserve banking and maturity transformation allow financial intermediaries to provide safe and easily accessible deposits to customers while investing those funds in riskier and less liquid assets.
Fractional reserve banking is a system in which financial institutions are required to hold only a fraction of the deposits they receive as reserves, while the rest can be used for lending and investment purposes. This allows them to create a larger amount of safe and liquid liabilities, such as demand deposits, than the actual reserves they possess. Simultaneously, financial intermediaries engage in maturity transformation, which involves borrowing short-term from depositors and using those funds to invest in longer-term and potentially riskier assets, such as loans or mortgages. By investing in these illiquid assets, financial intermediaries can earn a higher return. However, this practice also carries the risk of liquidity mismatches if depositors decide to withdraw their funds simultaneously or if the value of the invested assets declines significantly, potentially leading to financial instability.
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A client wants their staff Christmas party to have an 'Ancient
Greek' theme? How could this be created?
You are in charge of setting up and working with a quality
improvement team. Why would it be smart for you to begin with a
small problem to tackle and solve?
Starting with a small problem when setting up and working with a quality improvement team can be a smart approach for a few reasons.
Firstly, tackling a small problem allows the team to gain experience and build confidence in problem-solving. It provides an opportunity for team members to understand each other's strengths and working dynamics.
Additionally, solving a small problem helps to create a sense of achievement and motivation within the team, which can then be carried forward to tackle bigger challenges in the future.
Finally, addressing a small problem allows the team to test and refine their improvement strategies, enabling them to develop more effective approaches for larger and more complex issues.
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Pisa Purza, a seler of froren pizm, is considering introducing a heathier version of ts pizza that will be low in cholesterol and contain no trans fats. The firm expects that saies of the new pizza will bo $25 milion per year. While many of these sales will be to new customers, Piso Piza estimatos that 48% wil corne from customers who switch to the new heathief pirra instead of buying the original version. a. Assume customen wil spend the same amount on either version. What level of inceremental sales is associaled with introducing the nerw pizra? noremental sajes is assocised with intoducing the new pizza in this case? a. Assume customers will spend the same amount on ester version. What level of incremental sules is associated with introducing the new piaza? The incremental sales are 5 milion. (Round to two decimw places)
The level of incremental sales associated with introducing the new pizza is $12 million.
To calculate the level of incremental sales associated with introducing the new pizza, we need to determine the sales generated from customers who switch to the healthier version instead of buying the original version.
Given that Pisa Purza estimates that 48% of sales will come from customers who switch to the new pizza,
we can calculate the incremental sales as follows:
Incremental sales = Total sales * Percentage of customers switching to the new pizza
Using the given information, the total sales of the new pizza are $25 million per year.
Incremental sales = $25 million * 0.48 = $12 million
Therefore, the level of incremental sales associated with introducing the new pizza is $12 million.
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A retiree with a total monthly income of $300 and assets of less than $3,000 would be OA) not a likely prospect for LTC insurance B) an excellent prospect for LTC insurance OC) a reasonable prospect f
Based on the information provided, a retiree with a total monthly income of $300 and assets of less than $3,000 would likely be considered not a likely prospect for long-term care (LTC) insurance. Option A is the correct answer.
LTC insurance is intended to cover the costs of long-term care services such as nursing home care, assisted living, or in-home care.
It assists individuals with protecting their assets and providing financial assistance for their long-term care needs.
The retiree's total monthly income is relatively modest in this situation, and their assets are less than $3,000, indicating a limited financial capacity.
Premium payments are normally required for LTC insurance, and the cost of coverage might vary depending on criteria such as age, health, and the breadth of coverage needed.
Given the retiree's restricted income and assets, the premiums for LTC insurance may be difficult to afford.
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The preferred stock of ABC pays a constant $2.5 per share dividend. The common stock of ACME just paid a $1.5 dividend per share, but its dividend is expected to grow at 4 percent per year forever All two stocks have a 7 percent required return. How much should you be willing to pay fo a share of each stock? Which stock will give you the best return? Explain what is the relationship between dividend growth and the price of a stock. Please show all your work.
You should be willing to pay $35.71 for a share of preferred stock of ABC and $57.86 for a share of common stock of ACME.
Given:
Preferred stock of ABC pays a constant $2.5 per share dividend.
The common stock of ACME just paid a $1.5 dividend per share, but its dividend is expected to grow at 4 percent per year forever. Both stocks have a 7 percent required return.
To calculate the value of a share of preferred stock of ABC:
Value of preferred stock (PV) = D / R
where D = Dividend per share and
R = Required Rate of Return= $2.5 / 7%
= $35.71
To calculate the value of a share of common stock of ACME with constant growth rate:
Value of common stock (PV) = D1 / (R-g)
where D1 = Dividend expected in the next year,
R = Required Rate of Return, and
g = Growth rate in dividend
= $1.5 × (1 + 4%) / (7% - 4%)
= $57.86
The stock that will give you the best return is common stock of ACME because it has a higher expected value and the expected return is more than the required return. The relationship between dividend growth and the price of a stock is that as the dividend growth rate increases, the price of the stock also increases.
This is because the dividend is a source of income to the investor and a higher dividend means more income.
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Hedging is arguably the most important function of an options trader. The ability to limit the amount of risk a portfolio is subjected to is a vital function. You are going to explore one method of hedging risks: protective puts.choose a stock to theoretically obtain a put option on your stock. Assume you have 500 shares of the stock and five put option contracts. Compute your gain or loss on the combined position if the stock price increases 20% and decreases 20% at the time of expiry. Write a short report of what you found (including prices).
let's assume we have 500 shares of a particular stock and five put option contracts. The goal is to calculate the gain or loss on the combined position if the stock price increases by 20% and decreases by 20% at the time of expiry.
1. Selecting the stock and put options:
Choose a specific stock for the analysis. Let's assume we select XYZ stock.Obtain put option contracts for XYZ stock. The put options should have a suitable strike price and expiry date to provide adequate protection against potential losses.2. Current stock price and put option prices:
Determine the current price of XYZ stock. Let's assume it is $100 per share.Check the prices of the selected put options. Note down the strike price and the premium for each put option contract.3. Scenario 1: Stock price increases by 20%:
Calculate the new stock price after a 20% increase. In this case, the new stock price would be $120 per share.Since the stock price increased, the put options would not be exercised, and we would only have the 500 shares of stock.Calculate the gain or loss on the stock position by comparing the current value (500 shares * $120) with the initial investment (500 shares * $100).4. Scenario 2: Stock price decreases by 20%:
Calculate the new stock price after a 20% decrease. In this case, the new stock price would be $80 per share.Since the stock price decreased, the put options would be exercised, allowing us to sell the 500 shares at the strike price of the put options.Calculate the gain or loss on the stock position by comparing the value of the put options (500 shares * (strike price - $80)) with the initial investment (500 shares * $100).Subtract the premium paid for the put options from the gain or loss calculated above to account for the cost of buying the put options.5. Write a short report:
Summarize the findings of the analysis, including the stock price, put option prices, gain or loss in each scenario, and any additional observations.Discuss the effectiveness of the protective puts strategy in hedging against potential losses.Evaluate the cost of implementing the strategy, considering the premiums paid for the put options.To know more about Option Contracts visit:
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Cash dividends received in a long margin account. the cash dividends are credited to sma for how many days?
In a long margin account, the cash dividends are typically credited to the Special Memorandum Account (SMA) for the same number of days as the ex-dividend period.
When a company declares a dividend, there is usually an ex-dividend date specified.
date determines which shareholders are eligible to receive the dividend. To be eligible, an investor must own the stock before the ex-dividend date.
In the case of a long margin account, the investor holds the stock and is entitled to receive the dividend. However, since the stock is held on margin, the cash dividends received are credited to a separate account called the Special Memorandum Account (SMA).
The SMA is an account that keeps track of the excess equity in a margin account, including cash dividends. The purpose of crediting the cash dividends to the SMA is to reduce the outstanding margin loan balance.
The cash dividends are typically credited to the SMA for the same number of days as the ex-dividend period. The ex-dividend period is the timeframe between the ex-dividend date and the dividend payment date. It represents the days during which the stock trades without the dividend being factored into its price.
By crediting the cash dividends to the SMA for the ex-dividend period, the margin account reflects the reduction in the outstanding loan balance caused by the received dividends. This helps maintain accurate accounting and ensures that the investor benefits from the dividend payment.
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The Standard & Poor’s Index (S&P500) is computed by
a. The current market value of 500 stocks divided by initial value of 500 stocks.
b. The current market value of 500 stocks divided by initial value of 500 stocks, keep the number of shares (of each stock) no change in the two time, and adjust the stock split.
c. Adding the prices of the 500 stocks in the index and dividing by a divisor.
d. Adding the 500 stock individual index divided by 500. e. The current market value of 500 stocks divided by initial value of 500 stocks, keep the number of shares (of each stock) no change in the two time.
The S&P500 index is computed by dividing the current market value of the 500 stocks by the initial value of the same 500 stocks, while keeping the number of shares for each stock unchanged.
The S&P500 index is a widely recognized measure of the performance of the US stock market. It is computed by taking the market value of each of the 500 stocks in the index and summing them up. This sum represents the current market value of the 500 stocks. To calculate the index, this market value is divided by the initial value of the same 500 stocks. The initial value is typically set at a base level, such as 100. The resulting quotient is then multiplied by 100 to get the index value. Importantly, during the calculation, the number of shares for each stock remains the same, ensuring that changes in the index reflect only changes in the market value of the stocks and not changes in the number of shares outstanding.
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You are considering a safe investment opportunity that requires a $1,170 investment today, and will pay $790 two years from now and another $540 five years from now. a. What is the IRR of this investment? b. If you are choosing between this investment and putting your money in a safe bank account that pays an EAR of 5% per year for any horizon, can you make the decision by simply comparing this EAR with the IRR of the investment? Explain.
The Internal Rate of Return (IRR) of this investment is approximately 7.72%.
a. To calculate the Internal Rate of Return (IRR) of this investment, we need to find the discount rate that equates the present value of the cash inflows to the initial investment. In this case, the cash inflows are $790 in two years and $540 in five years.
Using the IRR formula, we set up the equation:
$1,170 = $790 / (1 + IRR)^2 + $540 / (1 + IRR)^5
Simplifying the equation, we get:
$1,170 = $790 / (1 + IRR)^2 + $540 / (1 + IRR)^5
We can solve this equation using trial and error, or by using financial calculators or Excel. The Internal Rate of Return of this investment is approximately 7.72%.
b. To compare the investment with a safe bank account that pays an Effective Annual Rate (EAR) of 5% per year, we need to consider the time horizon. The IRR of the investment represents the rate of return over the entire investment period. However, the EAR of the bank account represents the rate of return for each year.
To make an informed decision, we need to compare the IRR of the investment with the EAR of the bank account over the same time horizon. If the IRR is higher than the EAR, the investment would be more profitable. If the IRR is lower than the EAR, the bank account would be the better option.
Therefore, you cannot simply compare the EAR with the IRR to make a decision because they represent different time periods. You need to consider the time horizon and compare the rates of return over the same time frame to make an informed decision.
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A mortgage is use for ___________________.
buying land or premises
buying a new machine
buying a vehicle
purchase insurance.
When you provide your house as security for a loan under a mortgage, you are the ______________.
mortgagee
chargee
chargor
assignor.
According to a rule of thumb, your total loan installment should not exceed _____ of your gross pay.
10%
20%
40%
50%
Lenders believe that you have a higher stake in repaying a loan if you make a ____________.
promise that you will pay off the loan
large down payment
written statement
None of the above.
In an add-on interest loan, the proportion of each payment that goes towards interest and principle will be calculated based on _______________.
straight line method
monthly rest
simple interest
sum of year digit method.
The least expensive loan would be __________.
monthly rest loan
yearly rest loan
add-on interest loan
discount loan.
In the 5Cs credit model, the factor that refers to your legal age is ____________.
Collateral
Capacity
Condition
Capital.
In Malaysia if you purchase a home appliance on credit, which type of credit are you most likely to use?
Mortgage.
Leasing.
Hire purchase.
Personal loan.
Which of the following is a reason to invest your money?
Investing can help you reach your long-term financial goals.
You will receive a lower rate of return than from a savings account.
When you invest, you earn a lot of money in a very short period of time.
There is no risk involved in investing in the stock market.
A mortgage is used for buying land or premises.
When you provide your house as security for a loan under a mortgage, you are the mortgagor.
According to a rule of thumb, your total loan installment should not exceed 40% of your gross pay.
Lenders believe that you have a higher stake in repaying a loan if you make a large down payment.
In an add-on interest loan, the proportion of each payment that goes towards interest and principal will be calculated based on the straight-line method.
The least expensive loan would be a monthly rest loan.
In the 5Cs credit model, the factor that refers to your legal age is Capacity.
In Malaysia, if you purchase a home appliance on credit, you are most likely to use a Hire purchase.
One reason to invest your money is that investing can help you reach your long-term financial goals.
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Projected Spontaneous Liabilities Smiley Corporation's current sales and partial balance sheet are shown below. Soles are expected to grow by 12% next year: Assuming no change in operations from this year to next year, what are the projected spontaneous liabilities? D not round intermediate calculabions. Round your answer to the nearest dollac. $
The projected spontaneous liabilities for Smiley Corporation would be approximately $16,800.
To calculate the projected spontaneous liabilities for Smiley Corporation, we need to consider the current sales and partial balance sheet information provided. Here are the steps to determine the projected spontaneous liabilities:
1. Identify the relevant liabilities: Spontaneous liabilities typically include accounts payable, accrued expenses, and other short-term liabilities that arise from day-to-day operations.
2. Determine the growth rate: The question states that sales are expected to grow by 12% next year. This growth rate will be used to estimate the increase in spontaneous liabilities.
3. Calculate the projected sales: Multiply the current sales figure by the growth rate. For example, if the current sales are $100,000, the projected sales for next year would be $100,000 * 1.12 = $112,000.
4. Estimate the spontaneous liabilities: To estimate the spontaneous liabilities, you can use the current spontaneous liabilities as a percentage of sales. For example, if the current spontaneous liabilities are 15% of sales, then the estimated spontaneous liabilities for next year would be $112,000 * 0.15 = $16,800.
5. Round the answer: Round the estimated spontaneous liabilities to the nearest dollar. For example, if the calculated value is $16,800.45, round it to $16,800.
Therefore, the projected spontaneous liabilities for Smiley Corporation would be approximately $16,800.
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the graph to the right depicts the per unit cost curves and demand curve facing a shirt manufacturer in a competitive industry how much profit is this firm making per minute 6.63 5.70
The shirt manufacturer firm will not make any profit rather it will make a loss of $0.93 per minute.
To determine the profit per minute for the shirt manufacturer in the competitive industry, we need to find the difference between the per unit cost and the price at the quantity produced per minute.
The per unit cost is given as $6.63 and the price is $5.70.
To find the profit per minute, we subtract the per unit cost from the price:
Profit per minute = Price - Per unit cost
Profit per minute = $5.70 - $6.63
Profit per minute = -$0.93
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is attempting to determine costs associated with various jobs. Current production records show the following information for three recent jobs Assume overhead application rates of $14 per machine hour for the Machining Department and 200% of direct labor costs for the Fabrication Department.
1. Overhead cost for Job A in Machining Department = 10 machine hours * $14 per machine hour. 2. Overhead cost for Job B in Fabrication Department = $500 direct labor costs * 200%.
To determine the costs associated with various jobs using the given information, we need additional details about the direct labor costs and machine hours for each job. Without that information, we cannot calculate the specific costs for the jobs.
1. Machining Department:
The overhead application rate is $14 per machine hour. To allocate overhead costs to a job in the Machining Department, you would multiply the number of machine hours used by the overhead application rate. Let's assume Job A required 10 machine hours in the Machining Department. The overhead cost allocated to Job A would be: Overhead cost for Job A in Machining Department = 10 machine hours * $14 per machine hour.
2. Fabrication Department:
The overhead application rate is 200% of direct labor costs. To allocate overhead costs to a job in the Fabrication Department, you would multiply the direct labor costs for the job by the overhead application rate. Let's assume Job B had direct labor costs of $500 in the Fabrication Department. The overhead cost allocated to Job B would be: Overhead cost for Job B in Fabrication Department = $500 direct labor costs * 200%.
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All Bonds Are Semi-Annual. All Yield Measures Are Stated As Annual Percentage Rates. 1. Suppose You Buy A 2 Year 5% Bond That Has A Yield To Maturity (YTM) Of 6%. What Is The Price Of The Bond? 2. Suppose You Buy A 3 Year 6% Bond That Has A YTM Of 5%. What Is The Price Of The Bond? 3. Suppose You Buy A 10 Year 9% Bond That Has A YTM Of 11%. What Is The Price
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The underwriting process for surety bonding involves assessing the principal's creditworthiness and ability to fulfill contractual obligations, while fire insurance focuses on evaluating property risks and determining appropriate coverage levels.
Surety bonding underwriting involves evaluating the principal's financial stability, credit history, and industry experience to determine the likelihood of fulfilling contractual obligations. This process helps protect the obligee (the party receiving the bond) from potential financial losses. On the other hand, fire insurance underwriting focuses on assessing property risks, such as the building's condition, fire protection measures, and location. The underwriter calculates the appropriate coverage amount based on the property's value and potential risks. The primary goal of fire insurance underwriting is to ensure that the policy adequately covers potential fire-related damages or losses. While both surety bonding and fire insurance involve the underwriting process, they differ in their focus.
Surety bonding assesses the principal's creditworthiness and ability to fulfill contracts, while fire insurance evaluates property risks to determine appropriate coverage levels.
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