Answer:
he will charge to mother 7.6% interest
Explanation:
given data
expects inflation = 5.5%
earn = 2.1%
to find out
charge his mother for the loan
solution
we will apply here nominal return formula that is express as
nominal return = inflation rate + real return .................
put here value and we get
= 5.5% + 2.1%
= 7.6 %
so here he will charge to mother 7.6% interest
Answer: The new stock price of DL Inc. would be $37.50 if the covariance of its rate of return with the market portfolio halves on a permanent basis but everything else remains the same.
If the covariance of the security's rate of return with the market portfolio halves on a permanent basis but everything else remains the same, the security's new beta would be half its initial beta. The beta of a security is the covariance of the security's rate of return with the market portfolio divided by the variance of the market portfolio.The CAPM formula is used to compute the expected rate of return on a security, and it is as follows: Required return = risk-free rate of return + (beta x market risk premium).
The current price of DL Inc. stock can be calculated using the CAPM formula as follows: Beta = covariance of DL Inc. with the market portfolio/variance of the market portfolio= ?/ (8 x 8) = ?/64 where beta is unknown.Covariance of DL Inc. with the market portfolio = 0.5, Covariance of DL Inc. with the market portfolio = 0.5 x Var (DL Inc.)/Var (Market) = 0.5 Covariance of DL Inc. with the market portfolio is half the original covariance.
The beta for the security = 0.5 Covariance of DL Inc. with the market portfolio = 0.5 x ?Var (DL Inc.)/Var (Market) = 0.5 (0.5 x ?Var (DL Inc.)/Var (Market)) = ?Var (DL Inc.)/ (2 x Var (Market))Required rate of return = 4% + (0.5 x 8%) = 8%.DL Inc.'s current stock price = Dividend per share/ (required rate of return - growth rate) = $3/ (8% - 0%) = $37.50.
Therefore, the new stock price of DL Inc. would be $37.50 if the covariance of its rate of return with the market portfolio halves on a permanent basis but everything else remains the same.
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Answer:
D. Performance management supports administrative decisions that have a great impact on employees.
Answer:
Behaviorally anchored rating scales
Explanation:
b. Handling customer's money and credit cards
c. Following the restaurant's policies on complaints
d. Routine clean up of the parking lot.
Answer:
The proceeds from the bond issue are allocated between the bonds and the warrants on the basis of their relative market values.
Explanation:
Bonds are securities issued by the company where investor can invest in such securities and can earn interest.
Warrants are rights which states that on redemption of bonds it shall be converted into company's shares.
When bonds are issued with detachable warrants, that means there is a basic amount of bonds and warrants. Also, each shall be accounted separately.
Bond issue of these bonds includes value of bonds that shall be accounted and added to value of bonds, and the value of warrants shall be accounted in warrants.