Answer:
The current price of the common stock is $29.05
Explanation:
Cost of Equity = Rf + beta x MRP = 3% + 1.20 × 5.50% = 9.6%
Dividend in the n the year = D₀ × 
D₁ = $1.25 × 1.25 = $1.56255
D₂ = $1.5625 × 1.25 = $1.9531
D₃ = $1.9531 × 1.25 = $2.44
D₄ = $2.44 × 1.25 = $3.052
Terminal value = D₄ × 
= $3.052 x (1+0.0) ÷ (9.60 - 0.0)
= $31.79
Total value in 4th year = $3.052 + $31.79 = $34.8409
Total cash flows = $1.5625, $1.9531, $2.4414, $34.8409
(Present value Cash-flows at 9.60% ) $1.4256, $1.6260, $1.8544, $24.1461
= $29.05
Current price = $29.05
Answer:
The monthly payment is $2184.52
Explanation:
Given
Required
Firstly, the loan amount has to be calculated
The Question says; of the total amount spent, only 60% was borrowed;
So;
The monthly payment can then be calculated using the following formula
Where P = Loan Amount = 132,000
r = rate of payment = 5.95% = 0.0595
n = duration (in month)
n = 6 years
n = 6 * 12 months
n = 72 months;
Substitute the above parameters in the formula;
becomes
<em>Hence, the monthly payment is $2184.52</em>
Answer:
$18,000
Explanation:
According to the Internal revenue service, the useful life of the rental property would be 27.50 years.
The computation of the maximum amount of depreciation is shown below:
= (Purchase cost of building - allocated value of land - salvage value) ÷ useful life
= ($600,000 - $104,950 - $0) ÷ 27.50 years
= $495,050 ÷ 27.50 years
= $18,000
Answer:
a.
Date Account Title Debit Credit
Nov. 14 Note Receivable $4,800
Accounts Receivable $4,800
b.
Date Account Title Debit Credit
Dec, 14 Interest Receivable $56.40
Interest revenue $56.40
<u>Working </u>
= 4,800 * 9% * 47 days / 360
= $56.40
47 days is number of days from Nov. 14 to December 31.
c.
Date Account Title Debit Credit
Feb. 12 Cash $4,908
Interest receivable $56.40
Interest revenue $51.60
Notes Receivable $4,800
<u>Working:</u>
Cash = 4,800 + (4,800 * 90/360 * 9%)
= $4,908
Interest revenue = Cash - Interest receivable - Notes receivable
= 4,908 - 56.40 - 4,800
= $51.60
Answer:
Change in Nominal income = 5%
Change in real income = 2.9 %
Explanation:
<em>Real income </em><em>is the amount of basket of goods and services that can be actually purchased . It is the nominal income adjusted for inflation.</em>
<em>Real income = (CPi in base base year/ CPI current year) × Nominal income </em>
Real income for Sabrina
= (100/102) × 105,000
= 102,941.1765
<em>Change in real income</em> = (102,941.1765 -100,000)/100,000
= 2.9 %
<em>Change in Nominal income</em> = (105,000-100,000)/100,000
= 5%
