1)Use the following information to answer the question(s) below. Rearden Metals is considering opening a strip mining operation to provide some of the raw materials needed in producing Rearden metal. The initial purchase of the land and the associated costs of opening up mining operations will cost $100 million today. The mine is expected to generate $16 million worth of ore per year for the next 12 years. At the end of the 12th year Rearden will need to spend $20 million to restore the land to its original pristine nature appearance.The payback period for Rearden's mining operation is closest to: 2) Which of the following statements is false/true? If you believe that it is incorrect explain with its reasons. A-Future dividend payments and stock prices are not known with certainty; rather these values are based on the investor’s expectations at the time the stock is purchased. T/F…………………………………………………………………………………………………………………………………………………………………………… B-The capital gain is the difference between the expected sale price and the purchase price of the stock. T/F…………………………………………………………………………………………………………………………………………………………………………………... C-The sum of the dividend yield and the capital gain rate is called the total return of the stock. T/F…………………………………………………………………………………………………………………………………………………………………………………... D-We divide the capital gain by the expected future stock price to calculate the capital gain rate. T/F…………………………………………………………………………………………………………………………………………………………………………………... E-) If the return is riskless and never deviates from its mean, the variance is equal to one
1)Use the following information to answer the question(s) below.
Rearden Metals is considering opening a strip mining operation to provide some of the raw materials needed in producing Rearden metal. The initial purchase of the land and the associated costs of opening up mining operations will cost $100 million today. The mine is expected to generate $16 million worth of ore per year for the next 12 years. At the end of the 12th year Rearden will need to spend $20 million to restore the land to its original pristine nature appearance.The payback period for Rearden's mining operation is closest to:
2) Which of the following statements is false/true? If you believe that it is incorrect explain with its reasons.
A-Future dividend payments and stock prices are not known with certainty; rather these values are based on the investor’s expectations at the time the stock is purchased.
T/F……………………………………………………………………………………………………………………………………………………………………………
B-The
C-The sum of the dividend yield and the capital gain rate is called the total return of the stock. T/F…………………………………………………………………………………………………………………………………………………………………………………...
D-We divide the capital gain by the expected future stock price to calculate the capital gain rate. T/F…………………………………………………………………………………………………………………………………………………………………………………...
E-) If the return is riskless and never deviates from its mean, the variance is equal to one. T/F…………………………………………………………………………………………………………………………………………………………………………………...
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