Suppose you bought shares of a company for USD 10,000 last year, this year you sold it for USD 20,000. You are supposed to pay a 10% tax on capital gain. Explain the impact of a 100% inflation on the capital/gain profit you make.

Q: What is the stock’s current price per share before change?

A: Stock price: It is the current market value of the share of stock at which it is traded.…

Q: Michelle Walker is interested in buying the stock of Sandhill, Inc., which is increasing its…

A: Growth rate =7.70% Dividend =$2.65 Required return = 13.00%

Q: You purchased stock for $35,000 ten years ago.  Now the stock is worth $12,000.  What was your…

A: Given: Present value (PV) 25000 FV 12,000 Time period (Nper) 10

Q: A company has annual after-tax operating cash flows of P2,000,000 per year which are expected to…

A: After tax cash flow = P 2,000,000 WACC = 8%

Q: An enterprise with a profit before interest and tax of 150,000, a compound leverage level of 3 and a…

A: Compound Leverage =3 Financial Leverage = 1.5 Current Profit before interest and tax =150000…

Q: Hudson Corporation will pay a dividend of $3.10 per share next year. The company pledges to increase…

A: A model that helps to evaluate the value of the stock with the assumption that the dividend will…

Q: You have assets of Rs.7 million with no debt, and the tax is 40%. Your net income is Rs.2 million,…

A: We need to use constant growth model to calculate currant stock price Currant price par share(P0)…

Q: ink Corporation for the last five years earned and had average revenues of P6,000,000 annually. The…

A: Solution GIVEN Revenue every year 6000000 Expenses every year 5000000 Cost of…

Q: You just purchased a share of SPCC for ​$95. You expect to receive a dividend of ​$7 in one year. If…

A: Total return includes dividend yield and capital gain yield

Q: Poulter Corporation will pay a dividend of $4.40 per share next year. The company pledges to…

A: Given information: Next dividend is $4.40 Dividend growth rate is 5.75% Required rate of return is…

Q: Vapor Lock Motors’ EBIT is $7,000,000, the company’s interest expense is $2,000,000, and its tax…

A: DFL means how much the earnings of a firm change due to change in the debt-equity ratio of the firm.…

Q: after-tax benefit of $171 million. Devonshire Inc. has 5.7 million shares outstandi What is the…

A: Given information : Savings from the merger (millions)  $171 Shares outstanding (millions) 5.7…

Q: Suppose the corporate tax rate is 30%. Consider a firm that earns $1,000 in earnings before interest…

A: Value of firms equity of the value of the sum provided by the shareholders to the firm as price of…

Q: Bennett Industries invested $10,000,000 in a coventure one year ago. One year later, Bennett…

A: The calculation method where interest on interest is charged is known as Compound Interest. It is…

Q: Let’s consider the dividend and the dividend yield of the Calzone Corporation. Last year, the…

A: Part 1: Quarterly Dividend is a which given in every 3 months or it can be said this dividend…

Q: Uptown just paid $1.50 as its annual dividend and increases its dividend by 2.5% each year. What…

A: Here Dividend Growth model is applied:Given informtion:D 0 = 1.50Growth rate: 2.50%D1 = D0 +growth…

Q: Suppose the corporate tax rate is 38%, and investors pay a tax rate of 25% on income from dividends…

A: Given the following information: Corporate tax rate: 38% Tax rate paid by investors on income from…

Q: If a company is investing money at 6% interest compounded monthly and wants to have $40,000 in 4…

A: Calculate the payment as follows:

Q: IntFin Inc. has two investment opportunities that will pay each 10 per year for the upcoming 10…

A: Cash flows are the cash generated from the operation of the business organisation. In other words,…

Q: Suppose a​ firm's tax rate is 25 %. What effect would a $ 11.4 million capital expense have on this​…

A: Depreciation impacts net income

Q: Suppose you sell a fixed asset for $110,000 when its book value is $130,000. If your company's…

A: Loss on sale = Book value - Sale value of asset =(130000-110000) =$20000

Q: The current year's profits of Ferro Inc. is 1200 and the next year's profits are estimated as 1400…

A: Given, current Profit  = 1200 next year profit = 1400 growth rate = (next year profit / current year…

Q: Suppose you sell a fixed asset for $129,000 when its book value is $149,000. If your company’s…

A: Calculation of After-tax Cash Flow:The after-tax cash flow is $137,000.Excel Spreadsheet:

Q: You just purchased a share of Northstar Sports for $104.82. You expect to receive a dividend of…

A: It is given that :current stock price - $104.82 Dividend (next yr)- $5.05 Price in 1 yr - $106.88

Q: What effect would a$9.85 million operating expense have on this​ year's earnings? What effect would…

A: Information Provided: Tax rate = 25% Operating expense = $9.85 million

Q: H. J. Corp.'s common just paid a dividend of $5 for the year. Dividends are expected to grow at a 4%…

A: We need to use constant growth model to calculate cost of equity. The equation under  this model is…

Q: The firm incurs $70,000 in interest expenses each year.  If the tax rate of the firm is 30%m what is…

A: Formula:

Q: CEPS Group just paid an annual dividend of OMR 3.25 per share. Today, the company announced that…

A:

Q: A firm's stock is selling at 15 pesos. They just paid a 2 peso peso dividend and are expected to…

A: Capital gains yield: Capital gains yield measures the gain or loss with the difference between the…

Q: If you buy Disney stock at $85/ share and sell it for $90/ share and they pay a $1 dividend during…

A: Total Return - it means total earning on any security held for the time being, whether it is…

Q: igzaw Company has Sales amounting to P400,000 with expected increase of 25% next year. Net earnings…

A: Additional funds needed(AFN), as the name itself implies, refers to the additional funds the company…

Q: You require an 11 percent return on your investment. Big business Corp. will pay a $3.60 per share…

A: Before making an investment or forming a firm to work on a certain project, people want to know how…

Q: A company has annual after-tax operating cash flows of P2,000,000 per year which are expected to…

A: Annual after tax cash inflow = P 2,000,000 Weighted average cost of capital  = 8%

Q: The market price of a firmʹs stock increased 8% each year for three years. If both capital gains and…

A: Capital Gains: This is the amount of difference between the cost and sale price of a security or…

Q: Suppose you want to buy 10,000 shares of MegaWorld Corporation at a price of 4.00 You put up P10,000…

A: As you have posted multiple independent questions, we are answering the first question. Kindly…

Q: The Kempton Company just announced that it will be increasing its annual dividend to $1.88 next year…

A: Share price = Dividend / (Required return - Growth rate) where, Dividend = $1.88 Required return =…

Q: You are trying to determine the WACC for a company.  It has the following characteristics.  The…

A: WACC: WACC or the weighted average cost of capital is the return that a company must earn in order…

Q: Mr. Ali owns a company. There is a 30% probability that his Company's sales will be $15 million next…

A: Working note:

Q: Lily Co. is expected to pay a dividend of $12 at the end of this year. The firm would like to issue…

A: In this we have to calculate cost of equity using dividend discount model.

Q: You purchased stock for $25,000 ten years ago.  Now the stock is worth $10,000.  What was your…

A: Purchase price of the Stock 10 Years ago (pv) = $25,000 Current Worth of the Stock (fv) = $10,000…

Q: Suppose an investor gave you $150,000 to start your business. You gave this investor 50 percent of…

A: ROI  The return on investment (ROI) is calculated as a percentage of profit generated by a certain…