The reason the United States of America still views Native Americans as second-class citizens in a second-class system can be attributed to historical discrimination, lack of representation, and ongoing systemic issues.
Native Americans have faced marginalization since European settlers arrived, with forced removal from their lands and oppressive policies that persist in various forms today. Native Americans also have limited representation in mainstream media and politics, which contributes to their invisibility and hinders progress in addressing their needs.
Additionally, they continue to face challenges in accessing quality education, healthcare, and economic opportunities, leading to disparities in living standards. These factors, combined with prejudice and stereotypes, perpetuate the perception of Native Americans as second-class citizens.
To overcome this, the United States of America needs to address systemic issues, increase representation, and actively work towards eradicating discrimination and promoting equality for Native Americans.
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a good definition of lean is ""creating more value for customers with fewer resources.""
The given statement is true because the concept of "lean" refers to a systematic approach to eliminating waste and increasing efficiency in order to create more value for customers with fewer resources.
The focus is on identifying and eliminating any processes, activities, or resources that do not add value for the customer, while maximizing the use of those that do. By doing so, businesses can improve their competitiveness, reduce costs, and enhance customer satisfaction. Ultimately, the goal of lean is to create a more streamlined, efficient, and customer-centric organization that is better able to meet the needs and expectations of its customers.
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If WiseGuy Inc. uses payback period rule to choose projects, which of the projects (Project A or Project B) will WiseGuy Inc. prefer? Project A Project B
Time 0 -10000 -10000
Time 1 5000 4000
Time 2 4000 3000
Time 3 3000 10000
a) Project A b) Project B c) Project A and Project B have the same ranking. d) Cannot calculate a payback period without a discount rate If WiseGuy Inc. uses IRR rule to choose projects, which of the projects (Project A or Project B) will rank highest? a) Project A b) Project B c) Project A and Project B have the same ranking. d) Cannot calculate an IRR without a discount rate
WiseGuy Inc. would prefer Project B, as it has a shorter payback period of 1.3 years compared to Project A's payback period of 3.25 years.
How can we decide which projects (Project A or Project B) WiseGuy Inc. will prefer?To determine which project WiseGuy Inc. will prefer using the payback period rule, we need to calculate the payback period for each project. The payback period is the amount of time it takes for a project to recoup its initial investment.
For Project A:
Payback period = 2 years + ((10000-5000)/4000) years
Payback period = 3.25 years
For Project B:
Payback period = 1 year + ((10000-4000-3000)/10000) years
Payback period = 1.3 years
According to the payback period rule, WiseGuy Inc. would prefer Project B, as it has a shorter payback period of 1.3 years compared to Project A's payback period of 3.25 years. This means that WiseGuy Inc. will recoup its initial investment in Project B sooner, making it a more attractive option.
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Consider a five year corporate bond with a face value of $1,000. The bond currently pays a coupon of 5% per annum, but there is a chance the bond's issuer may default in five years time (just before the final payments on the bond are paid to bondholders).
There is a 80% chance that the bond will repay all of its cash flows in full, as promised. However, there is a 20% chance that the bond will default, and bondholders will only receive a fraction of the cash flows they were promised. Specifically, if the issuer defaults just before the maturity date of the bond, then bondholders will only receive $0.30 per $1 of cash flows they were promised on the maturity date. Given this default risk, the appropriate discount rate is 9% per annum.
What is the fair price of this corporate bond?
Group of answer choices
1049.14
844.42
1000
748.87
336.71
The fair price of the corporate bond is A)$1049.14
To calculate the fair price of the bond, we need to discount all the expected cash flows of the bond to their present values using the appropriate discount rate.
The bond pays a coupon of 5% per annum on the face value of $1,000, which means a cash flow of $50 per year. The bond matures in five years, and at maturity, the bondholders will receive the face value of $1,000.
Given the default risk of the bond, we need to adjust the expected cash flows by the probability of default and the recovery rate. The probability of default is 20%, and the recovery rate is 30%, which means that bondholders will only receive 30% of the face value if the issuer defaults.
Using the above information, we can calculate the expected cash flows as follows:
Expected cash flow = ($50 x 5 x 0.8) + ($1,000 x 0.8 x 0.2 x 0.3) = $196
Next, we need to discount the expected cash flows to their present values using the appropriate discount rate of 9% per annum. This can be done using the formula:
Present value = Cash flow / (1 + Discount rate) ^ Time
Using this formula, we can calculate the present value of the expected cash flows as follows:
Present value = ($50 / (1 + 0.09) ^ 1) + ($50 / (1 + 0.09) ^ 2) + ($50 / (1 + 0.09) ^ 3) + ($50 / (1 + 0.09) ^ 4) + ($1,196 / (1 + 0.09) ^ 5) = $853.13
Therefore, the fair price of the bond is the present value of the expected cash flows, which is $853.13. However, this price needs to be adjusted for the default risk, which reduces the expected cash flows by 20% x 30% = 6%. Therefore, the fair price of the bond is $853.13 x (1 - 0.06) = A)$1,048.87.
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Had to split question #16 into two photos for words to remain clear and visible.
What is the earnings credit rate? Assume the following: Ledger Balance = $300,000 Deposit Font - $100,000 Monthly Earnings Credit = $507 Days in Month 30 days Reserve Requirement Ratio * 10% No express your answer as a decimal (example: Nyour or a 4:33then enter it as 0.043) Thank you.
The monthly earnings credit is the amount of money a bank credits to a customer's account as compensation for the customer's deposits. The earnings credit rate for this scenario is 3.70%.
It is calculated based on the average daily balance in the account and the earnings credit rate (ECR) set by the bank.
To calculate the earnings credit rate (ECR) for this scenario, we need to use the following formula:
ECR = (Monthly earnings credit / Average daily balance) x (365 / Days in month)
We can calculate the average daily balance as follows:
Average daily balance = (Ledger balance + Deposit float) / Days in month
Average daily balance = ($300,000 + $100,000) / 30
= $13,333.33
We are given that the monthly earnings credit is $507, and the days in the month are 30. The reserve requirement ratio is also given as 10%.
Using the formula for ECR, we get:
ECR = ($507 / $13,333.33) x (365 / 30)
ECR = 0.036975 or 3.70% (rounded to two decimal places)
Therefore, the earnings credit rate for this scenario is 3.70%.
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This question point posible Next question Shatin Intl has 9.8 milion shares an equity cost of capital of 13.1% and is expected to pay a total dividend of $206 millor actor increasing its dividend, it will keep it constant and will startopurchasing 395 million of stock cach year as wil What is your attivare of Shat's so primo Seomet test The stock price will be Round to the nearest cont.)
The stock price of Shatin Intl, rounded to the nearest cent, is $160.31.Shatin Intl, which has 9.8 million shares, an equity cost of capital of 13.1%, and is expected to pay a total dividend of $206 million before starting to purchase $395 million worth of stock each year.
You'd like to know the stock price, rounded to the nearest cent.
To find the stock price, follow these steps:
1. Calculate the dividend per share: Divide the total dividend ($206 million) by the number of shares (9.8 million).
Dividend per share = $206 million / 9.8 million = $21.02
2. Calculate the dividend yield: Divide the dividend per share ($21.02) by the stock price (let's call it "P").
Dividend yield = $21.02 / P
3. Use the dividend discount model: The stock price (P) equals the dividend per share ($21.02) divided by the equity cost of capital (13.1%). P = $21.02 / 0.131
4. Solve for the stock price (P): P = $160.31
So, the stock price of Shatin Intl, rounded to the nearest cent, is $160.31.
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Based on the given information, the estimated stock price of Shatin Intl is $209.58 per share (rounded to the nearest cent).
Dividend per share = Total dividend / Number of shares
Dividend per share = $206 million / 9.8 million shares
Dividend per share = $21.02
Growth rate = (Net income - Dividends) / (Share price x Number of shares)\
Growth rate = ($500 million - $206 million) / ($50 x 9.8 million)
Growth rate = 3.06%
Finally, we can use the dividend discount model to estimate the stock price:
Stock price = Dividend per share / (Cost of equity - Growth rate)
Stock price = $21.02 / (0.131 - 0.0306)
Stock price = $21.02 / 0.1004
Stock price = $209.58
A stock price is the current market value of a company's stock share. It is determined by the supply and demand of the stock on a given day and is influenced by a variety of factors including company performance, industry trends, economic conditions, and investor sentiment. When a company goes public, it sells shares of its stock to investors in order to raise capital. The value of those shares is determined by the market and can fluctuate on a daily basis based on a variety of factors.
Investors buy and sell shares of stock in order to profit from changes in the stock price. If they buy shares at a lower price and sell them at a higher price, they profit. If they buy shares at a higher price and sell them at a lower price, they incur a loss. Overall, stock prices play a crucial role in the world of business and finance, as they can impact the success of companies and the portfolios of investors.
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TexCorp is a manufacturer. It costs TexCorp $70 (parts and labor) to manufacturer each unit, and it incurs fixed overhead of $3.75 million per year. If TexCorp prices the widgets using a 40% markup on cost, how many widgets must it sell annually in order to break even? Show work.
Based on the information given, TexCorp must sell 133,930 widgets annually in order to break even.
To find the break-even point for TexCorp, we will use the following terms: variable cost per unit, fixed cost, markup percentage, and selling price.
1: Calculate the variable cost per unit.
The variable cost per unit for TexCorp is $70 (parts and labor).
2: Calculate the selling price per unit.
TexCorp uses a 40% markup on cost, so we will calculate the selling price as follows:
Selling price = Variable cost per unit * (1 + Markup percentage)
Selling price = $70 * (1 + 0.40)
Selling price = $70 * 1.40
Selling price = $98 per unit
3: Calculate the contribution margin per unit.
Contribution margin per unit = Selling price per unit - Variable cost per unit
Contribution margin per unit = $98 - $70
Contribution margin per unit = $28
4: Calculate the break-even point in units.
Break-even point (units) = Fixed cost / Contribution margin per unit
Break-even point (units) = $3,750,000 / $28
Break-even point (units) = 133,929.29
Since TexCorp cannot sell a fraction of a widget, we round up to the nearest whole number.
Therefore, TexCorp must sell 133,930 widgets annually in order to break even.
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simple interest is computed by multiplying which of the following? (select all that apply.) multiple select question. accumulated interest initial investment period of time applicable interest rate
Simple interest is computed by multiplying the initial investment, the period of time, and the applicable interest rate.
Simple interest is a calculation of interest that does not take into account any compounding of interest over time. It is computed by multiplying the initial investment by the applicable interest rate and the period of time for which the interest is being calculated.
The result is the accumulated interest that is earned over that period of time. This calculation is simple and straightforward, which is why it is called "simple" interest. It is commonly used in loans, savings accounts, and other financial transactions where the interest rate is fixed and the interest is not compounded.
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year 2010 ending retained earnings were 2,000,000. year 2011 forecasted sales are $100,000 with 25% net margin and 20% dividend payout ratio. what are the forecasted retained earnings for year 2011?
In the year 2011, the forecasted retained earnings are calculated based on the year 2010 ending retained earnings, the forecasted sales, net margin, and dividend payout ratio.The year 2010 ending retained earnings were $2,000,000, and the year 2011 forecasted sales are $100,000 with a 25% net margin and a 20% dividend payout ratio. First, calculate the net income for 2011: $100,000 (sales) * 25% (net margin) = $25,000.
Next, calculate the dividends paid in 2011: $25,000 (net income) * 20% (dividend payout ratio) = $5,000.
Finally, calculate the forecasted retained earnings for year 2011: $2,000,000 (year 2010 retained earnings) + $25,000 (net income) - $5,000 (dividends) = $2,020,000.
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Weston Corporation just pold a dividend of $2 a shore (Do- 52). The dividend is expected to grow 11% a year for the next years and then at 4% a year thereafter. What is the expected dividend per share for each of the next 5 years?
The expected dividend per share for each of the next 5 years is $2.22, $2.47, $2.75, $3.06, and $3.41, respectively.
We can use the dividend growth model to calculate the expected dividend per share for each of the next 5 years. The formula for the dividend growth model is:
[tex]Dn = D0 x (1 + g)^n[/tex]
Where:
Dn = the expected dividend per share at year n
D0 = the current dividend per share
g = the expected growth rate of dividends
n = the number of years in the future
Using the information provided in the problem, we have:
D0 = $2 per share
g = 11% for the first five years, then 4% thereafter
So, the expected dividend per share for each of the next 5 years is:
[tex]D1 = D0 x (1 + g)^1 = $2 x (1 + 0.11)^1 = $2.22\\D2 = D0 x (1 + g)^2 = $2 x (1 + 0.11)^2 = $2.47\\D3 = D0 x (1 + g)^3 = $2 x (1 + 0.11)^3 = $2.75\\D4 = D0 x (1 + g)^4 = $2 x (1 + 0.11)^4 = $3.06\\D5 = D0 x (1 + g)^5 = $2 x (1 + 0.11)^5 = $3.41[/tex]
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Flashy Company stock has a beta of 1.2, the risk free rate is
3.67, and the market risk premium is 7.18. What is the firm's
required rate of return. ______% (to two decimal places)
The required rate of return for Flashy Company stock can be calculated using the Capital Asset Pricing Model (CAPM):
Required rate of return = risk-free rate + beta * market risk premium
Required rate of return = 3.67 + 1.2 * 7.18
Required rate of return = 12.29%
To calculate Flashy Company's required rate of return, you need to use the Capital Asset Pricing Model (CAPM). The formula for CAPM is:
Required Rate of Return = Risk-Free Rate + (Beta × Market Risk Premium)
Calculating using the given terms: Risk-Free Rate = 3.67, Beta = 1.2, Market Risk Premium = 7.18
Required Rate of Return = 3.67 + (1.2 × 7.18)
Required Rate of Return = 3.67 + 8.616
Required Rate of Return = 12.286
Round the result to two decimal places: 12.29%
So, Flashy Company's required rate of return is 12.29%.
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You have $145,000 to invest. You choose to put $195,000 into the market by borrowing $50,000.a. If the risk-free interest rate is 3% and the market expected return is 10 % what is the expected return of your investment?The expected return of your investment is _%?b. If the market volatility is 19 %, what is the volatility of your investment? calculate.
The expected return of the investment is 8.57% and the volatility of the investment is 38%.
To calculate the expected return of the investment, we need to calculate the weighted average return of the borrowed and invested amounts. The weight of the invested amount is (195,000/245,000) = 0.7959 and the weight of the borrowed amount is (50,000/245,000) = 0.2041. The expected return of the investment is then:
Expected return = (Weight of invested amount * Expected return of invested amount) + (Weight of borrowed amount * Risk-free rate)
Expected return = (0.7959 * 10%) + (0.2041 * 3%)
Expected return = 7.96% + 0.61%
Expected return = 8.57%
Therefore, the expected return of the investment is 8.57%.
The volatility of the investment can be calculated using the formula:
Volatility of investment = Square root of [(Weight of invested amount * Volatility of invested amount)^2 + (Weight of borrowed amount * Volatility of borrowed amount)^2 + 2 * Weight of invested amount * Weight of borrowed amount * Correlation coefficient * Volatility of invested amount * Volatility of borrowed amount]
Since the correlation coefficient is not given, we assume it to be 1 (which implies perfect positive correlation between the invested and borrowed amounts). The volatility of the borrowed amount is zero because it is risk-free. Therefore, the volatility of the investment is:
Volatility of investment = Square root of [(0.7959 * 19%)^2 + (0.2041 * 0%)^2 + 2 * 0.7959 * 0.2041 * 1 * 19% * 0%]
Volatility of investment = Square root of [0.1447]
Volatility of investment = 0.38 or 38%
Therefore, the volatility of the investment is 38%.
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marine international tries decide whether to produce the filter system in-house or sign an outsourcing contract with bayfront manufacturing. to establish a filter system production area at marine international, the fixed cost is $300,000 per year and the company estimates their variable cost of production in-house at $14 per filter system. if marine outsources the production of the filter system to bayfront, bayfront will charge marine $30 per filter system. what is the break-even quantity that marine international can produce in-house or outsource the filter system from bayfront manufacturing? a. 18,740 filter systems b. 18,750 filter systems c. 18,760 filter systems d. 18,770 filter systems e. 18,780 filter systems
The break-even quantity for Marine International is 18,750 filter systems. This means that if they produce more than 18,750 filter systems in-house, it will be more cost-effective to produce them in-house rather than outsourcing from Bayfront Manufacturing. If they produce less than 18,750 filter systems, it will be more cost-effective to outsource from Bayfront Manufacturing.
To determine the break-even quantity, we need to find the point where the cost of producing in-house is equal to the cost of outsourcing from Bayfront Manufacturing. We can set up an equation to represent this:
$300,000 + $14q = $30q
where q is the quantity of filter systems produced.
To solve for q, we can start by isolating q on one side of the equation:
$300,000 = $16q
q = $300,000 / $16
q = 18,750
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b. after receiving the second coupon payment (at the end of the second year), arjay decides to sell his bond in the bond market. what price can he expect for his bond if the one-year interest rate at that time is 3 percent? 8 percent? 10 percent?
If the one-year interest rate is 3 percent, Arjay can expect to sell his bond for $1,027.18, if the one-year interest rate is 8 percent, he can expect to sell it for $935.26, and if the one-year interest rate is 10 percent, he can expect to sell it for $881.35.
To determine the price that Arjay can expect to sell his bond for, we need to calculate the bond's current market value using the prevailing interest rates. The current market value of a bond is the present value of its future cash flows, which include both the remaining coupon payments and the principal repayment.
Let's assume the following details for the bond:
Face value = $1,000
Coupon rate = 6%
Coupon payments = $60 per year (=$1,000 x 6%)
Time to maturity = 3 years
Using these details, we can calculate the present value of the bond's cash flows at different interest rates:
If the one-year interest rate is 3 percent:
To calculate the bond price, we need to discount each cash flow by the corresponding discount factor. The discount factor for year 1 is 1/(1+3%) = 0.9709, for year 2 is 1/(1+3%)^2 = 0.9426, and for year 3 is 1/(1+3%)^3 = 0.9151.
Therefore, the current market value of the bond at a 3% interest rate would be:
Bond price = (60 x 0.9709) + (60 x 0.9426) + (1,060 x 0.9151) = $1,027.18
If the one-year interest rate is 8 percent:
Using the same methodology, we can calculate the present value of the bond's cash flows at an 8% interest rate:
Discount factor for year 1 = 1/(1+8%) = 0.9259
Discount factor for year 2 = 1/(1+8%)^2 = 0.8573
Discount factor for year 3 = 1/(1+8%)^3 = 0.7938
Therefore, the current market value of the bond at an 8% interest rate would be:
Bond price = (60 x 0.9259) + (60 x 0.8573) + (1,060 x 0.7938) = $935.26
If the one-year interest rate is 10 percent:
Using the same methodology, we can calculate the present value of the bond's cash flows at a 10% interest rate:
Discount factor for year 1 = 1/(1+10%) = 0.9091
Discount factor for year 2 = 1/(1+10%)^2 = 0.8264
Discount factor for year 3 = 1/(1+10%)^3 = 0.7513
Therefore, the current market value of the bond at a 10% interest rate would be:
Bond price = (60 x 0.9091) + (60 x 0.8264) + (1,060 x 0.7513) = $881.35
Therefore, if the one-year interest rate is 3 percent, Arjay can expect to sell his bond for $1,027.18, if the one-year interest rate is 8 percent, he can expect to sell it for $935.26, and if the one-year interest rate is 10 percent, he can expect to sell it for $881.35.
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Ronstadt Drum Company earned $710 million last year and paid out 25 percent of earnings in dividends. a. By how much did the company's retained earnings increase? (Do not round intermediate calculatio ns. Round the final answer to 1 decimal places. Enter the answer in millions. Omit $ sign in your response.) Addition to retained earnings $ million b. With 85 million shares outstanding and a share price of $40, what was the dividend yield? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places. Omit $ sign in your response.) Dividend yield %
a. The company's retained earnings increased by $532.5 million. b. The dividend yield is 5.22%.
a. To calculate the increase in retained earnings for Ronstadt Drum Company, first, find the total dividends paid by multiplying the earnings by the dividend payout ratio. Then, subtract the dividends from the total earnings to find the addition to retained earnings.
1: Calculate total dividends paid
Total dividends paid = Earnings * Dividend payout ratio
Total dividends paid = $710 million * 25%
Total dividends paid = $177.5 million
2: Calculate the addition to retained earnings
Addition to retained earnings = Total earnings - Total dividends paid
Addition to retained earnings = $710 million - $177.5 million
Addition to retained earnings = $532.5 million
b. To calculate the dividend yield, divide the total dividends paid per share by the share price.
1: Calculate dividends per share
Dividends per share = Total dividends paid / Number of shares outstanding
Dividends per share = $177.5 million / 85 million shares
Dividends per share = $2.0882 (rounded to 4 decimal places)
2: Calculate dividend yield
Dividend yield = Dividends per share / Share price
Dividend yield = $2.0882 / $40
Dividend yield = 0.0522
Convert to percentage: 0.0522 * 100 = 5.22%
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advertising is relevant for both business-to-business as well as for business-to-consumer approaches. select one: true false
True. advertising is relevant for both business-to-business (B2B) and business-to-consumer (B2C) tactics.
In a B2B context, advertising is often used to sell products or services to other corporations, inclusive of workplace materials or production equipment.
B2B advertising and marketing normally specializes in constructing relationships and generating leads rather than direct sales. In a B2C context, advertising is used to promote products or services without delay to purchasers, which include apparel, food, or entertainment.
B2C advertising and marketing frequently focuses on constructing brand focus and developing emotional connections with customers to inspire them to make purchases.
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True. advertising is relevant for both business-to-business (B2B) and business-to-consumer (B2C) tactics. In a B2B context, advertising is often used to sell products or services to other corporations,
inclusive of workplace materials or production equipment. B2B advertising and marketing normally specializes in constructing relationships and generating leads rather than direct sales. In a B2C context, advertising is used to promote products or services without delay to purchasers, which include apparel, food, or entertainment. B2C advertising and marketing frequently focuses on constructing brand focus and developing emotional connections with customers to inspire them to make purchases.
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The owner compiled and provided the following list of acceptable investment opportunities: Investment IRR (%) Initial investment (R)E 23 200 000C 22 100 000G 21 300 000A 19 200 000H 12 100 000I 9 400 000B 8 300 000The company aims to raise R1 000 000 for long-term investments. Capital budgets will be financed as per below: Log-term debt (40%): The company will borrow R400 000 at an after-tax cost of 8%. Ordinary shares (40%): The company will issue ordinary shares at the cost of 10%. Preferred shares: The company will finance the rest of the money by issuing preference shares at the cost of 13%. Calculate the company's weighted average cost of capital. (8 marks)
We have that, based on the list of acceptable investment opportunities, we obtain that the weighted average cost of capital of the company is 3.4%.
To calculate the weighted average cost of capital (WACC) of the company, we must take into account the cost of each type of financing and their respective weights in the capital structure.
Long-term debt financing has a weight of 40% (0.4) and a cost of 8% after tax. Therefore, the after-tax cost of debt is 0.4 x 0.08 = 0.032 or 3.2%.
Financing with ordinary shares also has a weight of 40% (0.4) and a cost of 10%. Therefore, the cost of capital is 0.4 x 0.1 = 0.04 or 4%.
The financing of preference shares has a weight of 20% (0.2) and a cost of 13%. Therefore, the cost of preferred stock is 0.2 x 0.13 = 0.026 or 2.6%.
To calculate the WACC we add the weighted costs of each type of financing:
WACC = (Weight of Long-Term Debt x Cost of Debt) + (Weight of Common Stock x Cost of Equity) + (Weight of Preferred Stock x Cost of Preferred Stock)
WACC = (0.4 x 0.032) + (0.4 x 0.04) + (0.2 x 0.026)
WACC = 0.0128 + 0.016 + 0.0052
WACC = 0.034 or 3.4%
Therefore, the company's weighted average cost of capital is 3.4%.
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when performing a retrospective for a project, whoever is performing the retrospective needs to be perceived as being independent and unbiased. question 40 options: true false
Whenever a retrospective is conducted for a project, the person doing the retrospective has to be seen as impartial and objective. True.
Anytime your team considers the past to enhance the present, it is a retrospective. You can retro on almost anything thanks to the technical and non-technical personnel! A public retrospective on agile software development is now being held.
You must be completely fair in order to be unbiased; you cannot favor someone or hold beliefs that can skew your judgment. For instance, in order to be as objective as possible, the identities of the artists, as well as the names of their schools and hometowns, were hidden from the judges of an art competition.
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Cajamadrid, S.A. issued preferred stocks in 2009. A preferred stock is simply a constant and perpetual annuity. Assuming that you got EUR 37 each year in terms of dividend, compute the price of the preferred stock in the market. The rate of discount of the preferred stocks is 22% annual. a. EUR 12. b. EUR 280. C. EUR 75. d. None of the above.
The present value of the anticipated future dividends, discounted by 22%, is used to determine the preferred stock's price, which is set at EUR 168.18. The correct option is d.
To compute the price of the preferred stock, we need to use the formula for the present value of a perpetual annuity:
Price = Dividend / Rate of Discount
Given that the dividend is EUR 37 per year and the rate of discount is 22% annually, we can calculate the price of the preferred stock as:
Price = 37 / 0.22 = EUR 168.18
Therefore, none of the options provided (a, b, c) match the calculated price. The correct answer is d. None of the above.
To explain further, the price of the preferred stock is determined by the present value of its expected future dividends. Since the dividends are constant and perpetual, we can use the formula for the present value of a perpetuity.
In this case, the rate of discount is 22%, which reflects the opportunity cost of investing in this preferred stock instead of other investment opportunities that may yield a higher return. The higher the discount rate, the lower the present value of the preferred stock, and vice versa.
Using the formula, we can see that the price of the preferred stock is EUR 168.18, which is the present value of the expected future dividends discounted at 22%.
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suppose you are a risk-averse person that does not like volatile returns. stock a offers a steady return of 5% per year. stock b offers a 3% return with 50% probability and a 10% return with 50% probability. which stock do you prefer?
As a risk-averse person, I would prefer the steady return offered by stock A at 5% per year.
As a risk-averse person who does not like volatile returns, you would prefer a stock with a steady return rather than one with more variability. In this case, stock A offers a steady return of 5% per year, while stock B offers a range of returns, with a 50% chance of a 3% return and a 50% chance of a 10% return.
The expected return of stock B is calculated as follows:
Expected return of stock B = (0.5 x 3%) + (0.5 x 10%) = 6.5%
However, the expected return does not take into account the variability of returns. Given that you are risk-averse, the potential for a 3% return would not be appealing, even with a 50% chance of getting a higher return. Therefore, you would prefer the steady return of 5% offered by stock A.
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One way to establish credibility is to become more dependent of
government when designing policy
Select one:
True
False
The statement "One way to establish credibility is to become more dependent of government when designing policy" is false because One way to establish credibility is not to become more dependent on the government when designing policy.
Credibility can be established by creating well-researched, evidence-based policies that are transparent and include input from various stakeholders.
Becoming more dependent on the government can limit the scope of perspectives and potentially reduce objectivity. To create credible policies, it's important to remain independent, gather data from multiple sources, engage in consultation with experts and the public, and have clear and accountable decision-making processes.
This approach ensures that policies are well-rounded, evidence-driven, and have the trust and support of the people they aim to serve.
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8. 5 pts. What is the current rate on a bond with a coupon rate of 5% selling at $900? Why is the current rate higher than the coupon rate? Show math for credit.
The current rate on a bond with a coupon rate of 5% selling at $900 can be calculated using the following formula:
Current Rate = Annual Coupon Payment / Bond Price
The annual coupon payment is calculated as 5% of the face value of the bond, which is $1,000 (5% x $1,000 = $50). So, the current rate can be calculated as follows:
Current Rate = $50 / $900 = 5.56%
Therefore, the current rate on a bond with a coupon rate of 5% selling at $900 is 5.56%.
The reason why the current rate is higher than the coupon rate is because the bond is selling at a discount. When a bond sells at a discount, it means that its price is lower than its face value. In this case, the bond is selling at $900, which is $100 less than its face value of $1,000. This is because the market demand for the bond is low, which causes its price to drop.
As a result, investors who purchase the bond at a discount will receive a higher yield than the coupon rate. This is because they are effectively paying less for the bond but will still receive the same coupon payments. In other words, the yield is higher to compensate for the lower price paid for the bond.
In summary, the current rate on a bond with a coupon rate of 5% selling at $900 is 5.56%. The current rate is higher than the coupon rate because the bond is selling at a discount, which causes its yield to increase.
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a company has accounts named purchases, purchases discounts, purchases returns and allowances, and freight-in as part of its chart of accounts. this company is using which system of inventory
The company is using the perpetual inventory system.
Based on the accounts named in the chart of accounts, the company is using the perpetual inventory system. In a perpetual inventory system, inventory balances are updated continuously as transactions occur. The purchases account is used to record the cost of inventory purchases, while the purchases discounts account is used to record discounts received from suppliers for prompt payment. T
he purchases returns and allowances account is used to record returns of damaged or unsatisfactory inventory. Finally, the freight-in account is used to record the cost of shipping inventory from suppliers to the company's warehouse. By tracking inventory in real-time, the perpetual inventory system provides businesses with accurate inventory information to help with decision-making and financial reporting.
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a change in the money supply will be the least effective when the money demand curve is relatively:
The money supply refers to the amount of money that is in circulation in an economy. It includes physical currency as well as bank deposits and other liquid assets.
However, the effectiveness of a change in the money supply depends on the state of the money demand curve. The money demand curve shows the relationship between the demand for money and the interest rate. When the interest rate is high, the demand for money tends to be low, and vice versa.
If the money demand curve is relatively flat, meaning that a change in the interest rate has little effect on the demand for money, then a change in the money supply will be the least effective. This is because a change in the money supply will not have much impact on the interest rate, which is the key variable that affects economic activity.
Overall, the effectiveness of a change in the money supply depends on the state of the money demand curve. When the money demand curve is relatively flat, a change in the money supply will be the least effective in affecting economic activity.
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A firm's bonds have a maturity of 12 years with a $1,000 face value, have an 11% semiannual coupon, are callable in 6 years at $1,199.90, and currently sell at a price of $1,349.76. What are their nominal yield to maturity and their nominal yield to call? Do not round intermediate calculations. Round your answers to two decimal places.
YTM: %
YTC: %
What return should investors expect to earn on these bonds?
A: Investors would expect the bonds to be called and to earn the YTC because the YTC is greater than the YTM.
B: Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC.
C: Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC.
D: Investors would expect the bonds to be called and to earn the YTC because the YTC is less than the YTM
The right response is: A. Because the YTC is higher than the YTM, investors would anticipate that the bonds would be called and earn the YTC.
How much nominal yield is there until maturity?The interest rate on the bond is shown by its nominal yield. Periodically up until the date of maturity, interest payments are made to the investor. A coupon yield is another name for nominal yield. To determine the bond's coupon yield, divide the annual interest payment by the bond's face value.
How is the nominal yield on a callable bond determined?The nominal yield, which represents the stated yield for a bond, is a fixed percentage figure determined for fixed income securities. It is computed by dividing the bond's face value by the annual interest payments.
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Omni Enterprises is considering whether to borrow funds and purchase an asset or to lease the asset under an operating lease arrangement. If it purchases the asset, the cost will be $22,000. It can borrow funds for four years at 8 percent interest. The asset will qualify for a 25 percent CCA. Assume a tax rate of 35 percent. The other alternative is to sign two operating leases, one with payments of $6,000 for the first two years and the other with payments of $8,000 for the last two years. The leases would be treated as operating leases. a. Compute the aftertax cost of the lease for the four years. (Negative answers should be indicated by a minus sign. Round the final answers to nearest whole dollar.) Year Aftertax cost 0 $ 1 2 3 4
The total aftertax cost of leasing the asset for four years is: Total aftertax cost: $3,900 + $3,900 + $5,200 + $5,200 = $18,200
To compare the aftertax cost of purchasing the asset versus leasing it, we need to calculate the aftertax cost of each option.
If Omni Enterprises purchases the asset, it can claim CCA of 25% on the cost of the asset, which will reduce its taxable income. Therefore, the aftertax cost of purchasing the asset can be calculated as:
Cost of asset: $22,000
CCA (25% of cost): $5,500
Taxable income: $22,000 - $5,500 = $16,500
Tax at 35%: $5,775
Aftertax cost: $22,000 + $5,775 = $27,775
If Omni Enterprises leases the asset, the aftertax cost of the lease for each year can be calculated as follows:
Year 1: $6,000
Tax deduction (lease payment): $6,000
Tax savings (at 35%): $2,100
Aftertax cost: $6,000 - $2,100 = $3,900
Year 2: $6,000
Tax deduction (lease payment): $6,000
Tax savings (at 35%): $2,100
Aftertax cost: $6,000 - $2,100 = $3,900
Year 3: $8,000
Tax deduction (lease payment): $8,000
Tax savings (at 35%): $2,800
Aftertax cost: $8,000 - $2,800 = $5,200
Year 4: $8,000
Tax deduction (lease payment): $8,000
Tax savings (at 35%): $2,800
Aftertax cost: $8,000 - $2,800 = $5,200
Therefore, the total aftertax cost of leasing the asset for four years is:
Total aftertax cost: $3,900 + $3,900 + $5,200 + $5,200 = $18,200
Comparing the aftertax cost of purchasing the asset ($27,775) with the aftertax cost of leasing the asset ($18,200), it is cheaper to lease the asset under the given conditions.
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1.if the actual unemployment rate is 8% and the natural rate of unemployment is 5%, then the cyclical unemployment rate is?
The natural rate of unemployment is subtracted from the actual unemployment rate to arrive at the cyclical unemployment rate.
(8% - 5% = 3%) The cyclical unemployment rate would be 3%.
The cyclical unemployment rate is calculated by subtracting the natural rate of unemployment from the actual unemployment rate. So, in this case, the cyclical unemployment rate would be 3% (8% - 5% = 3%). This represents the portion of unemployment that is due to the current economic cycle or downturn, rather than due to structural or frictional factors.
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what is the expected dollar rate of return on euro deposits it today's exchange rate is $1.167 per euro, next year's expected exchange rate is $1.10 per euro
The expected dollar rate of return on Euro deposits, today's exchange rate of $1.167 per Euro, and next year's expected exchange rate of $1.10 per Euro is -5.74%.
To calculate the expected dollar rate of return on Euro deposits, you need to consider today's exchange rate and next year's expected exchange rate. Here's a step-by-step explanation:
1. Today's exchange rate: $1.167 per Euro.
2. Next year's expected exchange rate: $1.10 per Euro.
3. Calculate the difference in exchange rates: $1.10 - $1.167 = -$0.067.
4. Divide the difference by today's exchange rate: -$0.067 / $1.167 = -0.0574.
5. Multiply the result by 100 to convert it to a percentage: -0.0574 * 100 = -5.74%.
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Pharmaceutical giant Eli Lilly and Belgium-based company Galapagos have a ____whereby they both work together to develop a new drug for osteoporosis.
- joint diversification
- divestment - strategic alliance - global integration
Pharmaceutical giant Eli Lilly and Belgium-based company Galapagos have a strategic alliance whereby they both work together to develop a new drug for osteoporosis. The correct option is strategic alliance.
In this strategic alliance, both companies collaborate and share resources, knowledge, and expertise to achieve a common goal: creating an effective treatment for osteoporosis. This partnership allows each company to benefit from the other's strengths, such as research capabilities, market reach, and technological advancements.
By joining forces, Eli Lilly and Galapagos can pool their resources to accelerate the drug development process and improve the chances of successfully bringing a new drug to market. This alliance is mutually beneficial and enables both companies to potentially gain a competitive edge in the pharmaceutical industry. Through their strategic alliance, Eli Lilly and Galapagos aim to make a meaningful impact on the lives of those suffering from osteoporosis by providing an effective treatment option. The correct option is strategic alliance.
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dormer is the only fine dining restaurant in a small town. the opening of a new restaurant is viewed as a threat by some of the employees at dormer. others see it as an opportunity for dormer to strengthen itself by looking out for its weaknesses and ironing them out. this is an example of strategy as:
Dormer is the only fine dining restaurant in a small town. The opening of a new restaurant is viewed as a threat by some of the employees at dormer by looking out for its weaknesses and ironing them out. This is an example of strategy as "SWOT analysis".
The SWOT analysis which involves assessing an organization's internal strengths and weaknesses as well as external opportunities and threats.
In this case, the opening of a new restaurant in the town presents an external threat to Dormer, the only fine dining restaurant in the area. Some of the employees at Dormer view this as a threat and are worried about the impact it could have on their business.
By conducting a SWOT analysis, Dormer can identify its internal strengths and weaknesses and external opportunities and threats. Based on this analysis, Dormer can develop strategies to leverage its strengths, address its weaknesses, capitalize on opportunities, and mitigate threats to maintain its competitive advantage in the market.
Therefore, this is an example of strategy as SWOT analysis.
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You are invested 38.00% in growth stocks with a beta of 1.839, 25.40% in value stocks with a beta of 1.412, and 36.60% in the market portfolio. What is the beta of your portfolio?
To calculate the beta of the portfolio, we need to first understand what beta represents. Beta is a measure of an investment's volatility in relation to the overall market. A beta of 1 means that the investment's volatility is equal to that of the market, while a beta greater than 1 indicates higher volatility and a beta less than 1 indicates lower volatility.
Using the information given, we can calculate the weighted average beta of the portfolio. To do this, we multiply the percentage of each investment by its respective beta, and then sum the results.
For the growth stocks, the calculation is 38.00% x 1.839 = 0.69982 ,For the value stocks, the calculation is 25.40% x 1.412 = 0.358968, For the market portfolio, the calculation is 36.60% x 1 = 0.366.
The sum of these calculations is 1.424788. This means that the portfolio has a beta of 1.424788, which is higher than the market beta of 1. This indicates that the portfolio is more volatile than the market as a whole, likely due to the higher weightings in growth and value stocks.
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