Answer:
CCC's new required rate of return is 16.5%
Explanation:
in the first we need to determine the risk free rate using the Capital Asset Pricing Model formula of Miller and Modgiliani as shown below
required return=Rf+beta*(average market return-Rf)
Rf is the risk free rate that is unknown
Beta is 1.5
average market return is 10%
required rate of return is 12%
Rf?
12%=Rf+1.5*(10%-Rf)
12%=Rf+15%-1.5Rf
1.5Rf-Rf=15%-12%
0.5Rf=3%
Rf=3%/0.5
Rf=6%
Average rate of 10% has now increased by 30% i.e 10%*(1+30%)=13%
Required rate of return=6%+1.5*(13%-6%)
=6%+1.5*7%
=6%+10.5%=16.5%
Answer:
Compound interest; amortized loans; amortization schedule; largest; decline; smallest; increases.
Explanation:
An important application of compound interest involves amortized loans. Some common types of amortized loans are automobile loans, home mortgage loans, and business loans. Each loan payment consists of interest and repayment of principal. This breakdown is often developed in an amortization schedule. Interest is largest in the first period and declines over the life of the loan, while the principal repayment is smallest in the first period and it increases thereafter.
Amortization in accounting is used to periodically lower the book value of a loan principal or an intangible asset such as intellectual property over a set period of time.
The compound interest formula is given below;
Where;
A is the future value.
P is the principal or starting amount.
r is annual interest rate.
n is the number of times the interest is compounded in a year.
t is the number of years for the compound interest.
Answer:
the bonds' current market value = PV of face value + PV of coupon payments
a. The bond has a 6 percent coupon rate.
PV of face value = $1,000 / (1 + 5%)²⁴ = $310.07
PV of coupon payments = 30 x 13.799 (PV annuity factor, 5%, 24 periods) = $413.97
bond's market value = $724.04
b. The bond has a 8 percent coupon rate.
PV of face value = $1,000 / (1 + 5%)²⁴ = $310.07
PV of coupon payments = 40 x 13.799 (PV annuity factor, 5%, 24 periods) = $551.96
bond's market value = $862.03
Answer:
$96,850
Explanation:
The net worth refers to the value of all the assets owned by a person or entity minus the value of all the liabilities. In Lana's case the assets are:
House $325,000
Guitar $750
Car $15,000
Stock investments $8,000
Savings Account $2,100
Total value of assets: $350,850
Lana's Liabilities:
Mortgage $245,000
Car loans $9,000
Total value of liabilities: $254,000
So, Lana's net worth would be:
$350,850-$254,000= $96,850
The answer is 1000
Density formula is weight/volume, so the unit should be gram/centimeter^3. To convert gram/centimeter^3 into kilogram/meter^3, the <span>conversion factors would be:
</span>(gram/centimeter^3) / (kilogram/meter^3)
= (gram/kilogram) /(centimeter^3/meter^3)
<span>= (gram/ 1000gram) / (centimeter^3/ 100^3 centimeter^3)
= (1/1000) / (1 / 100^3)
= 1,000,000/1000= 1,000</span>
