Answer:
Residual income is $53,500
Explanation:
To compute residual income, we have to find first the required minimum return by multiplying the value of an asset by the rate of return. Afterwards, we will deduct the minimum rate of return from the total net operating income of the period.
Residual income = net operating income - (minimum rate of return x value of an asset)
• = $85,000 - ( 14% x $225,000 )
• = $85,000 - $31,500
• = $53,500 (answer)
Answer:
You would need $14,382.21 to maintain your purchasing power.
Explanation:
Giving the following information:
You would like to retire in 30 years. The expected rate of inflation is 2% per year. You currently have a standard of living that requires $7940 of monthly expenses.
<u>The inflation rate has the same intrinsic behavior as an investment with a compounded interest rate.</u>
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We need to use the following formula:
FV= PV*(1+i)^n
FV= 7,940*(1.02^30)
FV= $14,382.21
You would need $14,382.21 to maintain your purchasing power.
Answer:
current share price is $71.05
Explanation:
given data
grow at a rate = 20 percent
time = 3 year
growth rate falling off = 8 percent
dividend = $1.45
solution
we get here price of the stock in Year 3 that is 1 year before the constant dividend growth that is
P(3) = D(3) × (1 + g) ÷ (R - g) .............1
P(3) = D0 (1 + g1)³ × (1 + g2) ÷ (R - g)
P(3) =
P(3) = $90.206
and
then price of the stock today is present value of first three dividends + present value of the Year 3 stock price
so price of the stock today is
P(0) =
P(0) = $71.05
Answer: product platform
Explanation: A product platform could be defined as a collection elements or specifications which may include design, pattern, formular, component or a certain technology adopted for building a certain product series. A product platform is aimed at increasing the speed and rate at which a certain product is produced, added flexibility in situations where little adjustment is required, cost effectiveness as it requures little upgrade in making new products and lessens developmental cost.
Answer:
Cost of Equity 16.33%
Explanation:
We solve for this using CAMP:
risk free = 0.0387
premium market = (market rate - risk free) 0.0903
beta(non diversifiable risk) = 1.38
Ke 0.16331 = 16.33%
We are given with the risk free rate of return and the market premium already so we just need to plug into the formula to solve for the expected return on the stock.