This is an Affirming the Consequent argument. It is the name
of an invalid conditional argument form or an invalid form of the modus ponens.
This is easily identified by remembering that any argument
that affirms the consequent is invalid.
Answer:
The bond today will be valued at 708.4252
Explanation:
The price for the bond will be the present value of 1,000 at the current market rate of 9%
We will use the present value of a lump sum to calculate this:
Maturity 1,000 dollars
time 4 years
rate 9% = 9/100 = 0.09
PV $708.4252
This will be the expected market value for the bond.
Answer:
<u><em>15.63%</em></u>
Explanation:
The answer is simply calculated by putting a simple formula in place.
The formula is, P = D/(r-g)
Hence, applying the formula, we have the following values,
P: 40 , D: 4.25 , g: 0.05 & r: ?
Step 1: 40 = 4.25/(r-0.05)
Step 2: r = (4.25/40)+0.05
Hence the cost of equity is = 15.63%
Thankyou.
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