Flipping is the process of acquiring IPO stock at the offer price and reselling it soon after. Therefore, the first option is the correct answer.
What is IPO flipping?
When an investor resells shares in the initial few days or weeks following an IPO, this is referred to as flipping. These investors benefit from the first IPO boom that hot issues experience.With lock-ups and instructions for beginning investors, IPO flipping is partially discouraged, but a new issue needs to have some flippers to generate trading volume and market buzz after the IPO.Financially speaking, IPO flipping can be advantageous because many stocks reach their best prices in the first few weeks and months following an IPO and may struggle for a while before reaching those heights, if at all.Read more about IPO: https://brainly.com/question/13015099
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last month the company had receipts totaling $3,700 this company has overhead cost a $444 what is the rate of overhead
The rate of overhead in the company is 12%.
How to calculate the rate of overhead?Total receipts = $3700
Overhead Cost = $444
(divide the overhead by total receipts)
444/3700
= 0.12
0.12 = 12%
What is meant by the rate of overhead?The overhead rate is calculated by dividing the total indirect costs (also known as overhead) for a certain reporting period by an allocation factor. Either real costs or planned expenditures might be included in the cost of overhead. Divide the company's monthly sales by its overall overhead expenses to determine the overhead rate. To determine your overhead rate, multiply this value by 100.
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new england corp has sold $3 million dollars of concrete forms to midwest enterprises. new england recorded the transaction as an account receivable and midwest as an account payable. this is an example of
This is an example of trade credit. Accounts payable (AP) is the word used to describe the short-term obligation and responsibility that a business has to its suppliers and vendors who have extended credit to it for goods or services.
They are in charge of tracking the company's short-term debts, paying vendor invoices and bills, and making payments the company owes to suppliers and services creditors. Since it is a liability, the amount owed to creditors for accounts payable is listed under "current liabilities" on a company's balance sheet. Current liabilities often have a maturity of fewer than 90 days.
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valdez company is considering eliminating its kitchen division, which reported an operating loss of $63,000 for the past year as shown below. segment income (loss) sales $ 1,240,000 variable costs 924,000 contribution margin 316,000 fixed costs 379,000 income (loss) $ (63,000) if the kitchen division is dropped, all $924,000 of its variable costs are avoidable, and $227,400 of its fixed costs are avoidable. the impact on valdez’s income from eliminating this business segment would be:
The impact on valdez’s income from eliminating this business segment would be business $151600.
What is business?The term “business” refers to the primary goal of generating a profit. The company is taking a risk and profiting from it. The enterprises' functions are focused on the creation, distribution, and sale of concepts.
valdez company the eliminating of the business.
contribution margin = sales - variable costs
contribution margin = 1,240,000 - 924,000
contribution margin = 316,000
Current loss= contribution margin - fixed costs
Current loss= 316,000 - 379,000
Current loss= (63,000)
Net loss if division is discontinued = 379,000 - $227,400
Net loss if division is discontinued = $151600.
As a result, this business segment would be business $151600.
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bill, a u.s. citizen, pays a spanish architect to design a metal casting factory. which country's exports increase?
Bill, a US citizen, pays a Spanish architect to design a metal casting factory. This will result in an increase in the exports of Spain.
Architects are people who plan, design and supervise the construction of buildings. For practical purposes, architecture means providing services related to the design of buildings and the spaces within the site around buildings that are inhabited or used as a primary purpose.
Career requirements for architects vary from place to place. Architects' decisions affect public safety and therefore architects must undergo specialized training including graduate education and practical experience in order to obtain a license to practice architecture.
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grey fox aviation company is analyzing a project that requires an initial investment of $550,000. the project’s expected cash flows are: year cash flow year 1 $375,000 year 2 –175,000 year 3 400,000 year 4 500,000 grey fox aviation company’s wacc is 7%, and the project has the same risk as the firm’s average project. calculate this project’s modified internal rate of return (mirr):
This Project Modified internal rate of rate is 19%. which is greater than 7%.
What does a high MIRR mean?Investment should be made if MIRR is greater than an anticipated return. When the MIRR is less than the anticipated return, a project should be abandoned. In addition, the project with the higher MIRR ought to be pursued if the two projects are mutually exclusive.
Given
Initial Investment = $550,000
Cash Flow = Year 1 $375.000 Year 2 -$175,000 Year 3 $400,000 Year 4 $500,000
Rate = 7%
Required to Calculate Modified internal rate of return =?
The required calculation is shown in the file attached given below.
Thus, the project should be accepted because the Modified internal rate of return (MIRR) is 19% which is greater than the required return.
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a competitive market may misallocate resources over time because a.the federal reserve sets interest rates different than the opportunity cost of consuming now versus later. b.current profits are worth more than future profits because of the time value of money. c.current profits are worth less than future profits because of the time value of money. d.the federal reserve always prefers capital investment over personal consumption.
The current profits are worth less than future profits.
Resource misallocation denotes a situation wherein capital and hard work are poorly allotted so that much less effective companies receive a larger proportion of capital and hard work than they have to according to their stage of productiveness. Such misallocation arises within the presence of distortions.
Useful resource misallocation not only affects financial performance, however additionally affects environmental overall performance by using increasing the pollutants emissions of firms. Secondly, strength is a first-rate aspect affecting economic improvement and environmentally nice.
Rapid inflation induces consumers to hurry up purchases, which consequently inhibits the choice of extra adequate buying and selling partners via search. This blurs differences across corporations of various productivities and ends in useful resource misallocations.
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3. jamie's motor home sales currently sells 1,000 class a motor homes, 2,500 class c motor homes, and 4,000 pop-up trailers each year. jamie is considering adding a mid-range camper and expects that if she does so she can sell 1,500 of them. however, if the new camper is added, jamie expects that her class a sales will decline to 950 units while the class c campers decline to 2,200. the sales of pop-ups will not be affected. class a motor homes sell for an average of $125,000 each. class c homes are priced at $39,500 and the pop-ups sell for $5,000 each. the new mid-range camper will sell for $47,900. what is the erosion cost?
The erosion cost is $18,100,000 when class c homes are priced at $39,500 and the pop-ups sell for $5,000 each and the new mid-range camper will sell for $47,900.
What Is Price Erosion and How Can You Prevent It?Price erosion occurs when you are obliged to cut your price—and thus the perceived worth of your product—in order to compete with unlicensed sellers or sellers who have broken your pricing policy. It is the gradual erosion of product pricing over time. If your brand is experiencing price erosion, it's a good indication that there's a problem with your retail partners somewhere down the line. All it takes is one severe offender to set off "race-to-the-bottom pricing," in which all of your retail partners violate your pricing policy in order to compete with the initial offender, and your price eventually drops so low that retailers must sell at cost to compete.
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every business exists primarily to create profits. true — a business might have other goals it wants to achieve, but its leaders must be focused on profits first in order to achieve those other goals. true - a business only exists to create profits for the people it employs. false — businesses should not think about profits at all. instead, they should find a higher purpose to fulfill. false — although most businesses have to generate profits in order to sustain themselves, every business exists to fulfill a specific purpose.
True - A business might have other goals it wants to achieve, but its leaders must be focused on profits first in order to achieve those other goals.
True - A business only exists to create profits for the people it employs.
False - Businesses should not think about profits at all. Instead, they should find a higher purpose to fulfill.
False - Although most businesses have to generate profits in order to sustain themselves, every business exists to fulfill a specific purpose.
Profits are not at all opposed to purpose; in fact, they are intricately interwoven.
If a business wants to properly serve all of its stakeholders over time—including shareholders, employees, consumers, and communities—profits are crucial.
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when you position products and departments with the same or similar end-uses beside each other, you are making use of the principle of
When you position products and departments with the same or similar end-uses beside each other, you are making use of the principle of adjacency.
What do you know about Principle of adjacency?
While the planning principles embedded in adjacency apply throughout the Commission's service area, applying the adjacency principle through the 1 road mile rule of thumb does not always account for the unique characteristics of each sub-region. Residents in Northern Maine, for example, are accustomed to driving long distances to work, access services, or participate in recreational activities. Residents in other areas may not be accustomed to driving such long distances to access the same range of services and activities. The proximity of commercial or industrial development to other similar types of facilities may not be the most important factor in deciding where to locate this type of development.
So, the required answer is principle of adjacency.
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if jim invested $100,000 in an annual dividend-paying stock today with a 7 percent return, what investment time period will give jim the greatest after-tax return?
The investment time period that will give Jim the greatest after-tax return is likely to be the longest possible period.
Calculate the annual dividend income that Jim will receive by multiplying the investment amount ($100,000) by the return rate (7%). This gives an annual dividend income of $7,000.
Calculate the taxes that Jim will owe on his dividend income by using the applicable tax rate. For example, if Jim is in the 25% tax bracket, then he will owe $1,750 in taxes.
Calculate the after-tax return by subtracting the taxes from the dividend income. In this example, the after-tax return would be $5,250.
Determine the investment time period that will give Jim the greatest after-tax return. The longer the investment period, the more likely it is that Jim will be able to benefit from compounding interest and thus achieve a greater after-tax return. Therefore, the investment time period that will give Jim the greatest after-tax return is likely to be the longest possible period.
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roberto and paige hold the same position at their company. however, roberto earns more than paige. in the context of pay structure, which statement justifies the organization's decision to pay roberto more than paige?
Roberto meets higher productivity targets than Paige justifies the organization's decision to pay Roberto more than Paige
A pay structure is a method for determining how much each person and job function should be paid depending on how valuable they are to the company and how well they perform their duties.
By setting a ceiling on the range paid for specific jobs or locations, a well-designed salary structure enables management to reward performance and skill development while keeping base salary costs under control.
Pay structures serve as the foundation of pay systems, establish the relationship between employee compensation and job value, and are an essential tool for ensuring that pay levels for jobs within an organization are both externally and internally equitable.
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legal and illegal labor migrants a. are called guest workers. b. provide many of the foods, goods, and services we consume daily. c. often receive long-term rights and privileges lacking in their nations of origin. d. fill niches that native-born workers want.
Legal and illegal labor migrants often receive long-term rights and privileges lacking in their nations of origin.
A wrong (from vintage English wrang – 'crooked')[1] is an act that is unlawful or immoral.[2] prison wrongs are normally quite virtually described inside the law of a country and/or jurisdiction. They can be divided into civil wrongs and crimes (or criminal offenses) in common regulation nations,[2] while civil regulation nations tend to have a few extra classes, inclusive of contraventions.
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In 1967, a lieutenant in the air force served for six months on active duty in vietnam. In 1998, the veteran was killed in a skiing accident. The veterans surviving spouse wishes to use the veterans life insurance proceeds to make a down payment on a condominium and finance the remainder of the purchase with a va-guaranteed loan. Is the surviving spouse entitled to a va-guaranteed loan?
Yes . the surviving is spouse entitled to a va- budgeting loan.
A sum of money that must be borrowed, frequently from a bank, and paid back, typically together with an additional sum that you must pay as a borrowing fee: She is attempting to obtain a loan for $50,000 to launch her own business. To purchase an automobile, we may apply for or take out a loan. A budgeting loan could be used to cover: home or furnishings products (such as washing machines or other "white goods") clothing or footwear rent in advance relocation expenses upkeep, security, or modifications to your home overseas travel expenses for the UK relocation expenses associated with finding a new employment, pregnancy expenses, funeral expenses, paying off hire purchase debt repaying loans obtained for the aforementioned goods.
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wilson company had the following cash balance items listed in its trial balance at 12/31/2024: peterson savings and loan: $ 60,000 right bank: (10,000) clinton county trust bank: 20,000 if wilson reports under ifrs, its 12/31/2024 balance sheet would show what cash balance?
The Cash Balance of company in the balance sheet would be $55,000.
What is a balance sheet?A balance sheet, whether it be for a corporation, a private limited company, a sole proprietorship, a business partnership, a government agency, or another type of entity like a not-for-profit organization, is a summary of the financial position of an entity in financial accounting. Assets make up the left side of a balance sheet for a typical business, and finance, which is made up of liabilities and ownership equity, makes up the right side. The major asset classes are typically listed first, in order of liquidity. According to the accounting formula, net worth is the total assets minus the total liabilities. The difference between the assets and the liabilities is referred to as the organization's capital, net assets, or net worth.
The Cash Balance will be :
= Peterson Savings and Loan + Trust Bank - Right Bank
= $50,000 + $10,000 - $5,000
= $55,000
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Complete the following sentence by selecting the best option from the list below. Thomas Cook Travel was one of the first tourism organizations to calculate the ___________________ of its customers. A: LoyaltyB: ExpendabilityC: ProfitabilityD: MarketabilityE: Manageability
Thomas Cook Travel was one of the first tourism organizations to calculate the Marketability of its customers.
Organizations are structures created to attain commonplace dreams through human-to-humans and people-to-work relationships. they're basically social entities that might be intention-directed, intentionally dependent on coordinated interest structures, and related to the outside surroundings.
There is a diffusion of felony forms of businesses, such as corporations, governments, non-governmental groups, political corporations, worldwide organizations, defense forces, charities, now not-for-profit agencies, partnerships, cooperatives, educational establishments, and many others.
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brandon, an individual, began business four years ago and has sold §1231 assets with $5,850 of losses within the last five years. brandon owned each of the assets for several years. in the current year, brandon sold the following business assets: asset original cost accumulated depreciation gain/loss machinery $ 31,700 $ 8,700 $ 10,850 land 57,000 0 28,500 building 124,000 37,000 (22,000) assuming brandon's marginal ordinary income tax rate is 32 percent, what effect do the gains and losses have on brandon's tax liability? use dividends and capital gains tax rates for reference.
For a long time, Brandon was the owner of each item. Business sold sect 1231 assets four years ago, suffering losses of $5,850 during the subsequent five years.
Which of the following best describes the calculation for gain or loss realized?Take the difference in the total consideration received and deduct the cost basis to arrive at the realized gain or loss. Positive differences represent realized gains. A realized loss has been realized if the difference is negative.
What is the capital gains and dividend tax rate?The tax rate on qualified dividends is the same as the capital gains tax rate, which is less than the rate on regular income. Ordinary dividends are taxed at the same 10% to 37% rate as regular federal income.
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Although the Bank for International Settlements originally limited its membership to European Central Banks, the United States Central Bank joined in 1974.False
Despite the fact that the financial institution for global Settlements initially limited its membership to ECU significant Banks, the USA's crucial financial institution joined in 1974. false
Financial institution for Worldwide Settlements group for primary bankers; operates to build cooperation so as to foster monetary and economic balance.
One way to apprehend how its capabilities is to think of it as the primary bank for central bankers.
Mounted in 1930 in Basel, Switzerland, the bank for international Settlements (BIS) is a financial institution for central banks. It takes deposits from and presents an extensive range of offerings too, important banks, and thru them, to the global economic device.
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Which of the following statements about striving to reduce labor costs per pair produced at each of the company's production facilities is true?Companies producing branded footwear with an S/Q rating above 5.0 stars are unlikely to achieve labor costs per pair produced that are below the industry average in those geographic regions where they have production facilitiesAchieving labor productivity of 3,700 pairs per worker at a production facility is nearly always sufficiently high for a company's production labor costs per pair (after rejects) at the facility to be close to the industry-low (as reported on p. 6 of the most recent FIR)Achieving labor costs per pair produced at a particular production facility that are below the region's industry-average (as reported on p. 6 of FIR) requires company managers each year to seek out a combination of base pay increases, incentive payments per non- defective pair produced, total annual compensation, and expenditures for best practices training at the facility that is projected to achieve labor costs per branded pair lower than the_prior year (since worker productivity at each production facility should be trending upward over time).The most cost effective way for a company to achieve low labor costs per pair produced is to give production workers annual base pay increases in the range of 10% to 15% annually in each geographic region where it has production facilities.The simplest and most effective way for a company to achieve labor costs per pair produced that are below the industry average is to compensate production workers at levels that are below the industry average in each geographic region where it has production facilities.
The simplest and most effective way for a company to achieve labor costs per pair produced that are below the industry average is to compensate production workers at levels that are below the industry average in each geographic region where it has production facilities.
Direct labor costs are part of payroll and can be or can be assigned specifically and consistently to the manufacture of products, specific work orders, or the provision of services.
Labor cost or gross labor cost is the total cost incurred by an employer to hire an employee. Total labor costs consist of:
Labor Accounting (LA) is used to allocate labor costs to the chart of accounts in the general ledger. In LA, you can find salary information for faculty, staff, and bi-weekly staff, including hourly wages for temporary staff and students.
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If the bauxite exporting countries form a cartel to boost the price of bauxite so as to increase sales revenue, they believe that the demand for bauxite:
a. Is inelastic with respect to price changes
b. Is elastic with respect to price changes
c. Will increase in response to a price increase
d. Will not change in response to a price change
They believe that demand for bauxite Is inelastic with respect to the price changes.
What is demand?Demand in economics refers to the quantity of a good that consumers are willing and able to buy at different prices at a particular time. The term "demand curve" refers to the correlation between price and quantity demand. An item's perceived necessity, price, perceived quality, convenience, alternatives that are offered, buyer preferences and disposable income, among many other factors, all affect how much demand there is for that particular item. How much the commodity costs: The basic link between a good's prospective prices and the quantities that would be bought at those prices is called the demand relationship. In general, the relationship is negative, which means that raising the price will result in lowering the quantity demanded. The slope of the consumer demand curve, which is negative, represents this relationship.
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person-to-person surveys offer you the most control over data gathering and are by far the easiest and cheapest survey method to employ. group of answer choices true
Person-to-person surveys offer you the most control over data gathering and are by far the easiest and cheapest survey method to employ is False.
Data series surveys gather information from a centered institution of human beings approximately their opinions, behavior, or knowledge. Common forms of instance surveys are written questionnaires, face-to-face or smartphone interviews, awareness groups, and electronic (e mail or website) surveys.
Content evaluation is a studies device used to decide the presence of sure words, themes, or principles inside a few given qualitative data (i.e., text). Using content material evaluation, researchers can quantify and examine the presence, meanings, and relationships of such sure words, themes, or principles.
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which of the following would not be directly included in aggregate demand? a. an increase in firms' inventories b. purchases of goods by households c. firms' purchases of newly produced machinery d. government's tax collections
D. government's tax collections would not be directly included in aggregate demand.
Aggregate demand for or domestic final call for is the total call for for final goods and services in an financial system at a given time. it's far often called effective demand, though at different times this term is prominent. that is the demand for the gross domestic fabricated from a rustic.
Aggregate demand, however, unearths the overall sum of the market for every unmarried product and provider that a financial system produces and expresses it as a complete dollar price. for example, a rustic may want to have a combination demand for goods and services equal to $1B according to year.
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the balance sheet approach to measuring bad debt expense focuses on multiple choice question. ratio of accounts receivable to sales. appropriate carrying value of accounts receivable. cash flows from sales.
Ratio of accounts receivable to sales.When a company is unable to collect its receivables because a client is unable to pay their debt and fulfil their obligation, a bad debt expense will be recorded.
The estimated bad debts will therefore be calculated as follows. ($25,000 x 2% - $100)\s= $500 - $100\s= $400.The following will be the journal entry to reflect the projected bad debt expense:
Debit: Cost of bad debt A/c $400
Credit: Doubtful debt allowance $400On the balance sheet, Accounts Receivable is reduced by the Allowance for Doubtful Accounts.A balance sheet is a statement of accounts that lists an organization's total assets, liabilities, capital, and net profit or loss.The term "receivables" describes the sum that the seller is due by the buyers or clients. Receivables are therefore recorded on the left side of the balance sheet as current assets in a corporation.Since it lowers the overall amount of accounts receivable, allowance for doubtful accounts is shown as a deduction below the accounts receivable.
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tina just sold her investment property. she’ll have to pay a transfer tax as well as recapture her depreciation. what other tax will apply?
This is as a result of depreciation recapture, which entails paying a 25% tax on the total amount of your depreciation deductions.
How is recaptured depreciation taxed?When a real estate investor sells the property, the depreciation costs they incurred are recovered. Taxes on depreciation recapture can reach a maximum of 25% of an investor's ordinary income tax rate. The capital gains tax rate on residual gains from the sale of a rental property is 0%, 15%, or 20%.
Do you pay for both recapture of capital gains and depreciation?Depreciation recapture involving real estate and properties is subject to capital gains tax. Capital gains tax is not included in the depreciation recapture for equipment and other assets, though.
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when people negotiate, much of the negotiation is simply beyond control. you can’t necessarily control how much power you have or the setting of the actual negotiation. to which type of negotiation approach does this relate?
When negotiating, people realize that much of the negotiation is simply beyond control and cannot necessarily control how much power we have or the setting of the actual negotiation. This perspective relates to the situational characteristic approach (B) in negotiation.
Situational characteristic approach or situational awareness is a negotiation approach where knowing the negotiation environment is critical to deciding the most appropriate strategy to be used. Situational awareness is important to understand the relationship or potential relationship one have with the other party. Situational awareness analyze the importance of outcome and importance of trust and relationship in a negotiation process.
Situational awareness is crucial in deciding the most effective approach to negotiate an outcome. There are 5 negotiation styles and strategies that one can choose based on the situational awareness analysis:
Comparative (win-lose) strategyAvoidance strategyAccommodation strategyCollaboration (win-win) strategyCompromise (win-lose/lose-win) strategy)Learn more about Situational Awareness in Negotiation here: https://brainly.com/question/15058033
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factor markets are different from product markets in an important way, group of answer choices factor markets are fraught with disequilibrium. the factor supply function is likely to be downward sloping. factor demand is a derived demand. factor demand is likely to be upward sloping.
Factor markets are different from product markets in an important way as factor demand is a derived demand.
Describe factor marketplaces.All of the resources that firms utilize to buy, rent, or hire what they require in order to produce goods or services are collectively referred to by economists as the "factor market." These requirements are met by the production factors, which include land, labor, capital, and raw materials. The market for factors is also known as the input market.
What kinds of marketplaces are factor markets?It can be described as a market for production inputs including land, labor, and raw materials. A job fair, the sale of land to a mall by its owner, or bank loans to business owners are a few instances of factor markets.
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suppose you bought a put option with a strike price of $35 for $4. what would be your payoff if the underlying stock is worth $48 at option expiration? (payoff, not profit)
The striking price, which establishes the price at which the option holder can buy or sell the underlying securities, is a crucial component of call and put options.
There are various options listed with strike prices above and below the current market value. Let's say that the share price of a stock is $100. The holder of the call option with a strike price of $110 would be entitled to purchase the shares at that price on or before the contract's expiration date. In other words, if the stock price drops, the option would be worth less, and if the price of the underlying stock rises, it would be worth more. The call will expire worthless if the price never rises beyond $110 before the expiration date, though. Considering that you might purchase the shares.
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compared to the original situation, where hip replacements cost $50,000 each but people had no insurance to help subsidize the cost, will the quantity demanded increase or decrease? increase by how much? 10000 surgeries
The quantity demanded will increase by 3,680 surgeries.
Price elasticity = 0.4
Insurance covers 70 percent of the bill.
This means that price has decreased by 70%.
When price decreases, quantity demanded increases.
Price elasticity = % change in quantity demanded/% change in price
0.4 = % change in quantity demanded/70
% change in quantity demanded = 28
Thus, the quantity demanded hip replacement will increase by 28 percent.
Price elasticity = 0.4
Insurance covers 95 percent of the bill.
This means that price has decreased by 95%.
When price decreases, quantity demanded increases.
Price elasticity = % change in quantity demanded/% change in price
0.4 = % change in quantity demanded/95
% change in quantity demanded = 38
Thus, the quantity demanded for hip replacement will increase by 38 percent.
The price of hip surgery has increased from $50,000 per surgery to $80,000 per surgery.
So,
New price = $80,000 per surgery
Insurance covers 95% of the price.
Amount covered by insurance = (95/100) * $80,000 = $76,000
Amount each insured person will pay = Price - Amount covered = $80,000 - $76,000 = $4,000
So, each insured patient will now pay $4,000 for hip replacement surgery.
Price elasticity = 0.4
Original demand (Q) = 10,000 surgeries
Original price (P) = $50,000
New price (P1) = $4,000
Calculate the percentage change in price -
% change in price = [(P1 - P)/P] * 100 = [(4,000 - 50,000)/50,000] * 100 = -92%
The negative sign indicates that the price has decreased. However, the negative sign can be ignored.
So, the percentage change in price equals 92 percent.
Price and quantity have an inverse relationship. As the price has decreased, the quantity demanded will increase.
So, the quantity demanded hip replacement surgery will increase.
Calculate % change in quantity demanded -
Price elasticity = % change in quantity demanded/% change in price
0.4 = % change in quantity demanded/92
% change in quantity demanded = 36.8
% increase in quantity demanded = 36.8
original demand = 10,000 surgeries
Increase in demand = 10,000 * (36.8/100) = 3,680
So, the quantity demanded will increase by 3,680 surgeries.
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a stock has an expected return of 6.5 percent, the risk-free rate is 1.1 percent, and the market risk premium is 5 percent. what is the stock's beta?
The stock beta for a stock that has an expected return of 6.5%, the risk-free rate 1.1%, and the market risk premium 5% is 1.08 (based on CAPM approach)
CAPM is an acronym of Capital Asset Pricing Model and it is a financial model that calculates the expected return for an asset or investment. CAPM will calculate by using the expected return on both market and from a risk-free asset, also with the asset's correlation with the beta value (sensitivity to the market).
How to calculate the stock's beta using CAPM formula?
Expected return = Rf + beta (Rm - Rf)
where
Rf = risk free rate = 1.1%
Rm - Rf = RPM = 5%
expected return = 6.5%
6.5% = 1.1% + beta * 5%
5.4% = beta * 5%
beta = 1.08
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assume preferred stock of ford motors pays a dividend of $4 each year and trades at a price of $35. what is the cost of preferred stock capital for ford?
If the preferred stock of ford motors pays a dividend of $4 each year and trades at a price of $35 than the cost of preferred stock capital for ford is 11.4%.
A stock is a general term accustomed describe the possession certificates of any company. A share, on the opposite hand, refers to the security of a selected company. Holding a selected company's share causes you to a investor. Description: Stocks square measure of 2 types—common and most popular.
Capital stock is that the quantity of common and preference shares that a corporation is allowed to issue, in keeping with its company charter. Capital stock will solely be issued by the corporate and is that the most variety of shares which will ever be outstanding.
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how much should the emergency fund hold, according to the recommendation for creating a responsible financial plan for personal finances?
At least three to six months' worth of expenses should the emergency fund hold, according to the recommendation for creating a responsible financial plan for personal finances.
According to Investopedia, “Personal finance defines all monetary choices and sports of a man or woman or household, which includes budgeting, insurance, loan planning, financial savings and retirement planning.”
Understanding those phrases assist you to higher manage your price range and put together for destiny monetary success. Though there are numerous components to private finance, they are effortlessly healthy into one in all 5 categories: income, spending, financial savings, making an investment and protection. These 5 regions are vital to shaping your private monetary planning.
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