From the investor's point of view, how is the rate of return on common equity a good indicator?

Q: Economists assert that financial markets serve the function of efficiently allocating capital. What…

A: The stock market, bond market, currency market, and derivatives market are just a few examples of…

Q: What's the value to you of a $1,000 face- value bond with an 8% coupon rate when your required rate…

A: A bond is an instrument being issuer to the holders of indebtedness of the bond.

Q: How long does it take to become a millionaire? A $500,000 investment will hit $1 million in 42 years…

A:

Q: Discuss the rationale for expecting an efficient capital market. What factor would you look for to…

A: Meaning of Efficient Capital Market: The term efficient capital market refers to the situation…

Q: List three benefits of portfolio capital....

A: A portfolio can be defined as a collection of financial or investment assets that individuals, hedge…

Q: If you reinvested all dividends, what would be the dollar value of your position on last day of…

A: SPY was the principal file trade exchanged asset (ETF) and completely repeats the file at a value…

Q: what is undervalued and overvalued shares? Explain why investor buy undervalued shares and sell over…

A: An investor may take up various investment decisions in order to generate income. This is because…

Q: Savings is a stock variable True/False

A: # The part of income which is not consumed is refferd to be as savings. Saving can be zero if whole…

Q: What is the value of the common stock of ABD Company if the dividend paid last year was $3.50, at a…

A: Stock: It refers to the security that shows represent the company's ownership. The more stock will…

Q: What is the process of Calculating the Return on Invested Capitalfor Mixed Investments?

A: Investment: The term investment refers to the employment of funds with the motive of getting…

Q: Suppose you invested $94 in the Ishares High Yield Fund (HYG) a month ago. It paid a dividend of…

A: Calculation of dividend yield: Dividend = 0.50, stock price = $95 =0.50/95 =0.52%

Q: Write the equation for Net-Present-Worth Criterion?

A: Net present worth is the difference of the present worth of all cash inflows and the present worth…

Q: How would you describe the relationship between a risky investment and the return on that investment…

A: Investors are two types one who loves the take risk and one who avoids risk basically they are risk…

Q: If a firm earns $375 billion in profits for the year and they retain $218 billion, how much do they…

A: Dividends means that amount which company pay to its stockholder after deduction of its cost and…

Q: Why do most investors hold diversified portfolios?

A: "Don't put all your eggs in one basket" This adage very well captures all the essence of…

Q: Distinguish between Simple investments and Nonsimple Investments?

A: The investments are an important factor for the growth of the economy which cannot grow without the…

Q: What do you mean by capital recovery factor?

A: Capital recovery factor can be explained as the ratio of constant annuity and the annuity's value…

Q: What are some of the major differences between common stock and preferred stock

A: A stock (sometimes called equity) is a financial instrument that represents ownership of a share of…

Q: what equation can determine whether a stock or asset is overvalued significantly?

A: Technical and quantitative analysis are used by traders to determine if a stock is overvalued.…

Q: If a firm earns $500 million in profits for the year and they retain $175 million, how much do they…

A: Retained earnings are those earnings that are earned by the firm but have not been returned to…

Q: Describe one of the simple method that is commonly used to screen capital investments?

A: The payback method is one of the simple methods used for the screening of capital investment before…

Q: A worker with an annual discount rate of 8 percent currently resides in Nigeria and is deciding…

A: Given, The discount rate = r = 8% or 0.08 The number of periods = t =3  Earning per worker in…

Q: if the market interest rate is equal to 5%, should you buy for 900 euros a coupon zero risk free…

A: We are going to find the terminal value in both alternatives to answer this question.

Q: True or False: With a discount bond, the return on thebond is equal to the rate of capital gain.

A: Financial economics deals with all the instruments which are used in several markets for speculative…

Q: Your bank account pays an interest rate of 8 percent. You are considering buying a share of stock in…

A: The interest rate is the amount a lender charges a borrower and is a percentage of the principal the…

Q: How do public pension plans differ in other countries? Has privatization worked overseas?

A: The market value of final products and services produced within the economy within a certain time…

Q: What is the meaning of Net Present Worth?

A: The net present worth also known as the net present value calculated the difference between the…

Q: What are the functions of stock exchanges in the economy?

A: The following problem has been answered as follows:

Q: True or false: Investors and lenders are the same group of people

A: The concept that depicts the allocation of money with the primary motive of having a benefit from it…

Q: Explain Net-Present-Worth Criterion?

A: The net- present-worth criterion is a very important and useful method to evaluate investment…

Q: A company has an investment project that would cost $10 million today and yield a payoff of $15…

A: Given: Initial investment = $10,000,000, Future Value (FV) = $15,000,000, time (t) = 4 years The…

Q: Define Purchase of Investment.

A: An investment is the purchase of products, the main purpose for which is to have gains. They are not…

Q: How much liability does stockholder assume?

A: Shareholder: Any person, company, or organization holding stock in a specific company.

Q: Explain Return on Invested Capital?

A: Return on Invested Capital (ROIC) is a profitability or performance ratio which aims to measure a…

Q: Do you think workers should be permitted to invest all or part of their Social Security contribution…

A: According to the Social security contribution, it is part of the salary earned by a person which is…

Q: discuss efficient portfolios and what information they can provide

A: A portfolio is defined as a grouping of financial investments such as bonds, stocks, cash,…

Q: A bond that is currently selling at $1,000 offers to pay $50 annually. What is the percentage rate…

A: Given information - Bond price = $1000 Return = $50

Q: Why may different analysts arrive at different intrinsicvalues for the same stock?

A: The stock market deals with several fluctuations with ups and downs and many other likely…

Q: How will your analysis assist you in determining the direction of the stock market?

A: The macroeconomics also include several factors for study of the stock market. To have a prescient…

Q: Which factors affect the yield to maturity (or return on investment?

A: Yield to Maturity provides a benchmark for evaluation of different types of investment instruments.

Q: Why would versification over purchasing one stock? Please provide a detailed example.

A: Answer- Versification over purchasing one stock with example- There are many mis conception about…

Q: The Kelowna Go-Kart Klub has decided to build a clubhouse and track five years from now. It must…

A: Write the formula used for calculation as follows: Amount = Amount to be accumulated/ (F/A, I,n)