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- 15) The nominal required return on XYZ stock is 14%. The nominal risk-free rate of return is 4% and the real risk-free rate of return is 2%. How much are investors requiring as compenssation for risk? What is the inflation premium?Following the COVID-19 pandemic, central banks have committed to keepingshort-term interest rates low to stimulate economies and financial markets, evenas the recovery gains traction. Discuss the implications of this commitment by thecentral-bank on a Takaful Operator’s investment performance and providerecommendations on how it should restructure its asset classes so to continuemeeting expected returns?The bank has a montly fixed cost of $10,000 plus an annual variable cost (interest paid on depsoits plus various admin fees equal to 5% of the loans created. Each loan is $100,000, 30 year fixed APR mortgage, and the unemployment rate is 5%. Q = 125-624ir +0.26F- 90.4U a) What is the bank's annual profits from this portfolio? b) What is the itnerest elasticity of demand for the loans? c) What is the unemployment elasticity of demand for loans? d)What is the cost function?
- Compute the price of a share of stock that pays a $5 peryear dividend and that you expect to be able to sell inone year for $40, assuming you require a 5% returnCarnes Cosmetics Co.'s stock price is $60, and it recently paid a $1.25 dividend. This dividend is expected to grow by 27% for the next 3 years, then grow forever at a constant rate, g; and rs = 14%. At what constant rate is the stock expected to grow after Year 3? Do not round intermediate calculations. Round your answer to two decimal places.The Evanec Company's next expected dividend, Ds, is $2.76; ts growth rate c 4; and ts common stock now sells for $28.00. Nex stock (externa equity) can be sald to net 532.30 per share. a. What is Evanec's cost o retained earmings, r? Do not round intermediate calculations, Round your answer to two decimal places. places.
- The demand ? (in billions of £) for a bond with coupon rate 5% and face value ?? = 1000, and two years to maturity as a function of its price ? is ? = 4000 − 2?. The supply in (billions of £)asafunctionofthepriceofthebondis ? = 2?+ 400. There is a business cycle expansion, so both supply and demand shifts. After the shift, the new demand curve is given by: ?=4000+?−2? ,whereas the new supply curve is ?=2? + 200. For which values of ? will the interest increase/decrease? Which values of ? are in line with empirical data?An owner can lease her building for $100,000 per year for three years. The explicit cost of maintaining the building is $35,000, and the implicit cost is $50,000. All revenues are received, and costs borne, at the end of each year. If the interest rate is 4 percent, determine the present value of the stream of: Instructions: Do not round intermediate calculations. Round your final calculation to two decimal places. a. Accounting profits. $104000 X b. Economic profits. $19000 xDeflation refers to the increase in purchasing power, while Inflation refers to the decrease in the purchasing power Select one: O True O False Next page R3- RATIO ANALYSIS (1) Jump to... CHAPTER 5- STOCK VALUATION- Al Hamooda (Log out) ENG 07 11 4407/0 INIT
- Millon National Bank has 8 million British pounds (£) in one-year assets and £6 million in one- е. year liabilities. In addition, it has one-year liabilities of 3.5 million euros (€). Assets are earning 8 percent and both liabilities are being paid at a rate of 7 percent. All interest and principal will be paid at the end of the year. What is the net interest income in dollars if the spot prices at the end of the year for US $ to British £ are $1.30/£ and for Euro to US $ are €1.25/$A firm is considering purchasing equipment to manufacture a new product. The equipment will cost $3M, and expected net cash inflowsare $0.35M indefinitely. If market demand for theproduct is low, then over the next five years thefirm will have the option of discarding the equipment on a secondary market for $2.2M. Assume thatMARR = 12%, s = 50%, and r = 6%. What isthe value of this investment opportunity for the firm?Which of the following statements is true about current and capital and financial acocunts? O A. Their sum equals zero B. Their sum is always negative C. Their sum is always positive D. They are unrelated