An investor sells short 500 shares of stock at 10 per share and covers the short position one year later when the price of the stock has declined to 7.5. The margin requirement is 50%. Interest on the margin deposit is 8% effective. Four dividends of 0.15 per share are paid. Calculate the yield rate.

Q: The Fed's action did not affect the forecasted cash flows. Вy how much did the change in the…

A: Net present value (NPV) of an alternative/project refers to the variance between the initial…

Q: Present value of complex cash​ flows)  You have an opportunity to make an investment that will pay…

A: NPV is the difference between Present Value of cash Inflows and Initial Investment. A project with…

Q: Suppose you have the opportunity to invest in a bond which matures in three years has a face value…

A: To get the present value of a bond the future cash flows need to be discounted using the discount…

Q: Using the data above, calculate the following: • Cost of common equity using retained earnings •…

A: Cost of preference shares refers to the amount paid to the preference shareholders of the company in…

Q: Excellent Enterprises has an unlevered beta of 1.2. Excellent is financed with 50% debt and has a…

A: The risk premium is the additional amount of returns provided to the investors in order to draw them…

Q: nterpreting beta A firm wishes to assess the impact of changes in the market return on annasset that…

A: In finance beta is a measure of volatility or systematic risk. Beta shows the volatility of returns…

Q: What does the inventory turnover ratio mean?

A: Inventory turnover ratio gives the days required for the company from the date of its purchase to…

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A: Future Value(FV) is ascertained to know the expected value of current amount that will be invested…

Q: 3.1.1 An amortized loan has 10 annual payments at the end of each year starting one year from now.…

A: Here,

Q: . Determine the median of the set of values

A: Ascending order 13 , 19 , 19, 21 , 27 , 39 , 52 , 73 , 88 , 90 , 96

Q: What would be your bond equivalent yield if you sold the bond for current market price of $1,040​?

A: Bond Equivalent Yield: It is the expected return a bondholder will realize on a bond for a period…

Q: The Davis Corporation (DC) owns a building covered by the ISO Earthquake and Volcanic Eruption…

A: Insurance compensation: When covered damages occur, the amount paid by an insurance company to the…

Q: Lucinda placed $12,000 in a 16-month term deposit paying 5.05% simple interest. How much will the…

A: Deposit amount = $12000 Period = 16 Months Interest rate = 5.05%

Q: Continental Railroad Company is evaluating three capital investment proposals by using the net…

A: Note: None of the three capital investments has a negative NPV or PI less than 1. Hence, answer for…

Q: retail coffee company is planning to open 105 new coffee outlets that are expected to generate $15.7…

A: NPV = Free Cashflow/( WACC - Growth)

Q: An investor is asked to invest in a project as follows: Invest RS 000 now, at year 1, invest a…

A: Year Particular Amount 0 Investment 5000 1 Investment 1000 2 Return 2000 4 Investment 3000…

Q: The required floodplain management plan and necessary Rate Maps are developed.     Local taxes are…

A: National Flood Insurance Program which is managed by the Federal Emergency Management Agency enables…

Q: Scenario 2: Bremily Firewood Company is expanding their operations. The company has an expansion…

A: NPV means PV of net benefits arises from the project during the project life. It is computed by…

Q: 14. Determine the numerical value of the factor (F/A, 5%, 10). A 0.1295 B 0.0795 12.5779 D 7.7217

A: Future value is the value of a certain sum of money in the future. The future value of the annuity…

Q: For the cost of equity (stock) is it better to use the current US Treasury bill rate or a…

A: For determining the cost of equity we often use the CAPM model. The CAPM model states that: Cost of…

Q: the real risk-free rate is 3.50% and the future rate of inflation is expected to be constant at…

A: The below answer is given by two methods , but the appropriate is fist method which is simple rate…

Q: The NZ Equity market is illiquid, both in the primary and secondary markets. What does market…

A: An equity market is a market where companies' stock is issued and traded, either through exchanges…

Q: Duration measures... Neither interest rate risk nor reinvestment risk. reinvestment risk. Both…

A: Duration can be intuitively defined for fixed-coupon bonds as the average maturity of all bond…

Q: Apple Corp. had the following portfolio of financial instruments of the December 31, 2020. All…

A: Realized gain on the sale of the bond When a bond is sold before its maturity, the realized gain…

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A: In finance a discount series is essentially a chain of discounts. Here multiple discounts are…

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A: Beta Beta is a measure of risk associated with a security. It tells about the volatility of the…

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A: NPV is the difference between Present Value of cash Inflows and Initial Investment.  NPV = Present…

Q: Investments Quick and Slow cost $1,000 each, are mutually exclusive, and have the following cash…

A: NPV of Q = 1100*(1+i)^-1 - 1000 = 1100*1.07^-1 - 1000 = 1028.037 - 1000 = $28.0 NPV of S =…

Q: what is the new value of the portfolio, and what return did it earn? After the price change, what…

A: Expected return refers to the return earn by an investor on the amount invested during a period of…

Q: You would like to have ​$53,000 in 13 years. To accumulate this​ amount, you plan to deposit an…

A: Amount to accumulate is $53,000 Interest rate is 6% Time period is 13 years To Find:- Annual…

Q: Q2): A person deposits $28,500 into a savings account that earns 5% interest per year. At the end of…

A: Given That: deposited money(P)= $28500 Interest rate (r)=5%=0.05 per year Amount wants to be…

Q: nformation concerning the capital structure of the Petrock Corporation is as follows:     December…

A: Earnings per share is the amount which is available to the shareholder per share after paying…

Q: omas has been working at Gulf Oil for ten years. His performance has been good and he has received…

A: Share options are a type of employee perk that allows the employees to buy shares of a firm at a…

Q: Michael Sanchez purchased a condominium for $94,000. He made a 20% down payment and financed the…

A: A mortgage is a loan on a property where the property itself is used as collateral.

Q: rate of interest is typically the required rate of return on a three-month Philippine Treasury bill.

A: The risk free rate is a rate of return that is free from any kid of risk. This is the return an…

Q: how can you distinguish between simple and compound interest? 2. If you were given a chance to…

A: Interest can be defined as the value of money over a period of time. It is charged by lenders to…

Q: If you want to be paid from a 15 year ordinary annuity with a guaranteed rate of 4.277% compounded…

A: Annual payment (C) = $10,000 Period (n) = 15 Years rate (r) = 0.04277 (i.e. 4.277%) Present value or…

Q: What is the price of the stock today?

A: Share price: It represents the current worth to the sellers and buyers of stock and can be…

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A: Given, The cost of equipment is $300,000 After-tax cashflows $96,500 Required rate of return is 10%

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A: Net value of the assets is the remaining value left after all liabilities.

Q: he level of financial risk to which a firm is exposed is dependent on the firm's: (a) tax rate (b)…

A: Financial risk can be defined as the risk of availing of finance and not being able to return it. It…

Q: Aluminum maker Alcoa has a beta of about 1.98​, whereas Hormel Foods has a beta of 0.44. If the…

A: Answer -   Cist of Capital formula - RF + (RM-RF) * Beta    Given data - a. For ALcoa - Beta = 1.98…

Q: What is the IRR for Machine D over a 4-year project life with the following details: Machine D…

A: Internal rate of return refers to the cost of capital that makes a net present value of project is…

Q: A loan of R250 000 is secured at an interest rate of 14% p.a. (cm) and will be amortized by equal…

A: Here, Loan amount = R250,000 Interest rate = 14% compounded monthly  Term of loan = 20 years No. of…

Q: What is the appropriate discount rate for RiverRocks to use to evaluate the acquisition? Why? The…

A: Appropriate discount rate = 15.2%

Q: Calculate the mean (that is, calculate the arithmetic mean) of the following set of values. Round to…

A: Answer - Formula of Arithmetic Mean - AM = Sum of Observation ÷ Total numbers of Observations  A…

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A: Given, Dividend paid last year is $1.90 required return is 16%

Q: Calculate the tax rate if the tax amount is $ 64.50 on a purchase of $780?

A: Tax amount = $64.50 Purchase  = $780

Loanable Funds Theory

The loanable funds theory is a neoclassical theory that determines the interest rate where the demand for loanable investments and supply of loanable funds intersect. To determine the interest rate, this theory employs linear regression and a demand curve. At the equilibrium point, demand for borrowings and demand for the issuance of borrowing funds are inextricably linked. This point of equilibrium should equalize demand and the supply of money available for borrowing.