Answer:
2,557,065 shares
Explanation:
Offer price = $30 per share
Underwriters Charge : 8%
If the company's underwriters sells new shares at the $30 per share issue price, Whistling straits corporation will receive:
offer price x (1 - underwriters charge)
= $30 × (1 - 0.08) = $27.60
The number of shares that needs to be sold will be:
= 2,557,065.217
≈ 2,557,065
Therefore number of shares to be issued will be = 2557065 shares
Answer: Depreciation is tax deductible
Explanation:
Depreciation on assets is recognized by tax authorities as an expense that a business actually incurs so when the income statement is calculated, depreciation needs to be removed as the expense that it is so that taxes can be calculated on the profit.
Depreciation however, does not take actual cash from the company i.e the company does not actually pay anyone cash for depreciation like most other expenses. It needs therefore to be added back to the Free Cash Flow because the FCF deals with how much actual cash the company has which is something that Depreciation being a non-cash expense did not reduce.
It should be noted that the inefficient allocation if resources is market failure.
<h3>What is market failure? </h3>
It should be noted that market failure simply means the inefficient distribution of goods and services.
Market failure is the the inability of a market to bring about the allocation of resources that best satisfies the wants of society.
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Answer: 10%
Explanation:
The Capital Asset Pricing Model or CAPM for short can be used to calculate expected return in the following manner,
Expected return = Rf+B(Rm-Rf)
Rf = Risk free rate
B = Beta
Rm= Market return.
Plugging the figures in we have
Expected return = Rf+B(Rm-Rf)
= 0.04 + 1(0.1 - 0.04)
= 0.1
= 10%
Investors select a stock based on the cash they expect to receive from that stock. that cash comes in the form of a and b.
Investors are usually different from traders. Investors invest capital for long-term gains, while traders buy and sell securities repeatedly in pursuit of short-term gains. Investors typically generate income by investing capital in either stocks or debt.
So how does an investor choose which stocks to buy?He has two main investment styles: active and passive. Active investors try to outperform the market by buying stocks that they believe are undervalued, with the intention of selling when the stock price rises.
Stock pick. An active portfolio management approach that focuses on a favorable selection of specific stocks rather than broad asset allocation.
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The question is incomplete. Please read below to find the missing content.
Investors select a stock based on the case they expect to receive from that stock. That cash comes in the form of ____.
a. Dividends
b. The future sales price.
c. Interest payments.
d. Commissions.
