Explain why there is a cost associated with retained earnings

Q: According to the capital structure trade-off model: O a. The optimal capital structure minimizes the…

A: Capital structure refers to the mix of source from where the long term funds required in a business…

Q: What is the accumulated value after five years of payments of $20000 made at the beginning of each…

A: Solution:- When an equal amount of payment is made each period at the beginning of period, it is…

Q: You are a real estate agent thinking of placing a sign advertising your services at a local bus…

A: To calculate the payback period we will use the below formula   Payback period = Initial cost/Equal…

Q: If Sandy can afford car payments of $320 per month for 7 years, what is the price of a car that she…

A: A series of equal payments at regular intervals over a period of time is called annuity. If the…

Q: How do you segment the International Financial Markets?

A: Main segments of international financial segments are 1. Buying segment 2. Selling segment 3.…

Q: In order to buy a vacation home, Neal and Lilly took out a 20-year mortgage for $220,000 at an…

A: 1. Calculating the monthly payments on original loan using the table given in question: Original…

Q: Calculate the yield to maturity of a bond with the help of the following given information: -…

A: Yield to maturity = [Interest +(Face value - Market price) /Life if bond]/[Face value + Market…

Q: what amount today is equivalent to $10,000 four years ago, if money earned 5.5% compounded monthly…

A: Solution:- When an amount is invested somewhere, it earns interest.  The amount initially invested…

Q: you invested in a corporate bond that has a market price today of R983.87and a yield to maturity of…

A: A Bond refers to an instrument that represents the loan being made by the investor to the company…

Q: What is the bond's coupon rate?

A: Bond Coupon Rate: It refers to the yield rate paid by the issuer to the bondholder. It is estimated…

Q: Assume a company has 10 million of total assets: the market value of equity is 8 million and market…

A: The Weighted Average Cost of Capital(WACC) refers to the financial ratio that provides the overall…

Q: You are considering a bond with the following characteristics: R100 Par Value 10% Annual Coupon 5…

A: The Price of Bond is calculated with the help of following formula  Price of Bond = Present Value of…

Q: Merchandise is received for $25,000 now and $50,000 in 6 months. If $10,000 is paid within a month,…

A: Since you have posted multiple questions, as per answering guidelines we shall be solving first…

Q: With a $100,000 investment in a new injection moulding machine, A-Design Inc., a company specialized…

A: The payback period is the span of time necessary to repay the cost of an investment. Simply…

Q: Which one of the followings is NOT a money market financial instrument? A) Treasury Bills OB)…

A: Solution:- Money market financial instruments are those financial instruments whose maturity values…

Q: You have $10,000 to invest for five years. - How much additional interest will you earn if the…

A: Given Information : Amount invested - $10,000 (Present value) Rate of interest (r) - 5%/4.5% Time…

Q: You have just purchased a share of stock for $21.11. The company is expected to pay a dividend of…

A: Required return means the percentage return required over the amount invested. So, required return =…

Q: Investor A buys a 20 year, 5% annual coupon bond, with an YTM = 6,5%, expecting to have a return…

A: YTM It is the internal rate of return on a bond when the bond is held till its maturity. A bond…

Q: National Corporation is considering buying common shares in ABC Corporation. National Corporation…

A: Given: Expected dividend = P400 Risk free rate = 7.5% Beta = 1.75 Market return = 11.3% Growth rate…

Q: John purchased a $20,000 20-year bond at a 2% dis- count. It pays semiannually at a rate of 4% per…

A: In case of bond interest is payable annually, semi annually as per initially agreed, but it is…

Q: Which of the following statements is true? OA. When a large proportion of income is spent on a…

A: To find: We have to answer in this question which of the statement is true.

Q: Southern Pole is developing a special vehicle for Antarctic exploration. The development requires…

A: Solution:- Net Present value (NPV) means the net value in today’s terms after adjusting present…

Q: A person deposits a sum of Rs. 20,000 at the interest rate of 18% compounded annually for 10  years…

A: Given: Deposit amount=Rs 20,000=P interest rate=18% compounded annually =I duration=10 years=N To…

Q: When Lamar had 4 years left in college, he took out a student loan for $16,790. The loan has an…

A: As per the information provided : Student loan taken for - $16,790 Annual interest rate - 4.8%…

Q: How much should Timothy's dad invest into a savings account today, to be able to pay for Timothy's…

A: Solution:- When an equal amount is deposited each period at beginning of period, it is called…

Q: A JBH share has just paid a dividend of $1.25 per share. This dividend is expected to grow at a rate…

A: The Supernormal Growth Model is the model in which the value of the stock is measured through its…

Q: An article in the Wall Street Journal describes recent economic events as having "steepened the…

A: The yield curve shows the relationship between the yield to maturity and the term to maturity for…

Q: What is meant by maturity date?

A: Bonds are simply corporate debt units that are issued by firms and securitized as tradeable assets.…

Q: On the advice of your uncle, you purchased 10 shares of a well-established U.S.-based corporate…

A: Given: Initial purchase = 10 shares Price per stock for initial purchase = $21 Number of dividends…

Q: A​ bond's market price is ​$1,175. It has a ​$1,000 par​ value, will mature in 8 ​years, and has a…

A: Here, To Find: Yield to Maturity (YTM) =?

Q: What is meant by securities exchange?

A: A stock exchange, usually known as a securities exchange. This is a market where the stockbrokers…

Q: 19) If returns of S&P 500 stocks are normally distributed, what range of returns would you expect to…

A: Solution: To find the 95% confidence interval, use the following formula Average + (2 * standard…

Q: On what factors do the interest rate and repayment terms for term loans based?

A: Loan refers to the lending of money  by one ore more individuals  or organizations . The recipient…

Q: (Yield-To-Maturity) for $990. You have just bought a 5% coupon $1,000 face-value bond with 3 years…

A: Given: Particulars   Years(NPER) 3 Coupon rate 5% Par value $1,000 Current Price (PV)…

Q: securities that mature in 6 years currently have an interest rate of 8.5%. Inflation is expected to…

A: A notional rate of interest that an investor can receive on an investment with no risks is known as…

Q: How important is trade credit as a source of short-term financing?

A: Trade Credit is the largest use of capital  by the business -to business sellers in the United…

Q: National Corporation expects to generate free-cash flows of P300,000 per year for the next five…

A: Answer -   Free cash flow From Year 1 to 5 = $300000   Step 1 : Calculation of Cashflow of 6th Year…

Q: What is Temporary financing?

A: There are various sources of temporary financing which are as follows: a) Commercial paper b) Bank…

Q: Estimate the annual percent rate for the add on loan Using the given number of payments and annual…

A: As per the information provided:  N = 48 R = 8% To determine: We have to estimate the annual…

Q: A division of Raytheon owns a 5-year-old turret lathe used to manufacture fabricated metal products…

A: Incremental Analysis: Incremental analysis is a technique that is used to compare different projects…

Q: Which of the following factors influences the spread between forward and spot rates? a. which…

A: Spot rate is the current rate of the stock or bond or currency and forward rate is the price that is…

Q: Suppose the spot rate and the 90-day forward rate on the Brazilian real are 3.3054 and 3.3263,…

A: Given: Spot rate: 1$=3.3054 brazilian real 90 days forward rate=3.3263 brazilian real 3-month…

Q: Truffles Chocolate Factory has decided to expand. Last year, the company paid TCC; a marketing…

A: NPV is a technique under Capital budgeting which help in decision making on the basis of future cash…

Q: Production has indicated that they can produce widgets at a cost of P4.00 each if they lease new…

A: In a production, total benefit comes from sales revenue, which is the units sold times price per…

Q: this solution does not take into consideration the time value of money over the 40 years. That is,…

A: Data given R=6% Initial investment = $92000000 Maintenance cost for the first year = $150000…

Q: Why might Apple have needed to hold on to so much cash in excess of what it needed to operate? What…

A: Besides being known for its popular products like the i-phones, i-pads, etc. Apple is also popular…

Q: Weber Interstate Paving Co. had $450 million of sales and $225 million of fixed assets last year, so…

A: Solution:- When an asset is sold, there is cash inflow due to sale proceeds. On the other hand, when…

Q: Given that the cost of common stock is 15 percent, dividends are P1.50 per share, and the price of…

A: To calculate the growth rate we will use the dividend grow modal formula   P0 = D1/(r-g) Where P0 -…

Q: Assume you have a student loan that you will pay off in 10 years. How much would you save an…

A: The question is related to refinancing the loan at lower interest rate which was originally financed…

Q: financial position

A: Financial reporting refers to the process of the documentation and communication of all the…