Answer:
-$11 million
Explanation:
According to the scenario, computation of the given data are as follow:-
We can calculate the impact of transactions on retained earnings by using following formula:-
Impact of transactions on retained earnings = - common dividend - preferred dividend - loss on sale of equipment
= -$3 million - $2 million - $6 million
= - $11 million
All three items should be deducted as it has a negative impact on the retained earnings
Answer:
A) -0.55
B) The negativity in the estimated elasticity suggests that for every 1% increase in the price of transport there will be a corresponding 0.55% decrease in the number of Commuters
Explanation:
Given data:
current fare (P0) = $4
hiked fare (P1) = $6
change in fare = $2
number of rides before increase ( Q0 ) = 10000
number of rides after increase ( Q1 ) = 8000
change in rides = 2000
A) The estimated elasticity of demand for MRT rides using the midpoint /ARC method
Mid point method = [ ( Q1 - Q0 ) / ( Q1 + Q0 ) ] / [ (P1 - P0 ) / (P1 + P0 ) ]
= [ - 2000 / 18000 ] / [ 2 / 10 ]
= - 1000 / 1800 = - 5 / 9 ( estimated elasticity )
= - 0.55
B) The negativity in the estimated elasticity suggests that for every 1% increase in the price of transport there will be a corresponding 0.55% decrease in Commuters
Answer:
PV= $23,370.85
Explanation:
Giving the following information:
Cash flow (1-3)= $5,000
Cash flow (4-5)= $6,500
Discount rate= 6%
To calculate the present value, first, we need to calculate the final value:
FV= {A*[(1+i)^n-1]}/i
A= annual cash flow
Year 1-3:
FV= {5,000*[(1.06^3) - 1] / 0.06
FV= 15,918
Year 4-5:
FV= {6,500*[(1.06^2) - 1]} / 0.06
FV= 13,390
Now, the present value:
PV= FV/(1+i)^n
PV= 15,918/(1.06^3)= 13,365.06
PV= 13,390/(1.06^5)= 10,005.79
PV= $23,370.85
Answer:
Price lowers and becomes negative or -5.37 dollars
Explanation:
Market risk premium's formula could be written as dividends/price + dividend's growth rate. Therefore, we dividend growth rate according to the current price and dividend level equal to market risk premium - dividends/price or 0.15 - 1/15.43 = 0.086 or 8.6%. If the dividend growth rate rises by 25% than new one is 33.6%. Price is equal to dividends/market risk premium - dividend growth rate or in this case 1/0.15-0.336 or 1/-0.186 or -5.37 dollars. If the price is negative that would mean that any future selling of the stock would mean that ABC would have to pay in order to sell it.
