The compound annual return. Introduction: Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

Question

Want to see more full solutions like this?

Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 7, Problem 1OR

Summary Introduction

To determine: The compound annual return.

Introduction:

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

Expert Solution

Explanation of Solution

Given information:

T Company initial price of the share is $17 and its price increase to $90 after three years. The company has sold 13.3 million shares in its IPO with a par value of $0.001 per share.

The formula to compute the compound annual return is as follows:

Compound annual return=(Amount of increase in share price Initial share price)1Number of years−1

Compute the compound annual return:

Compound annual return=(Amount of increase in share price Initial share price)1Number of years−1=($90$17)13−1=($90$17)0.33333−1=1.7429−1=0.7429 or 74.29%

Hence, the compound annual return is 74.29%.

Summary Introduction

To discuss: The method used to value the shares in year 2013.

Expert Solution

Explanation of Solution

The method used to value the shares in year 2013 is as follows:

Free cash flow valuation model is used to value the shares of the firm without dividend facts. It is because T Company has never paid dividend and they will not pay any dividend in future too. Therefore, free cash flow valuation model is the most suitable to value the firm’s share.

Summary Introduction

To determine: The paid-in-capital recorded in the balance sheet.

Expert Solution

Explanation of Solution

Given information:

T Company initial price of the share is $17 and its price increase to $90 after three years. The company has sold 13.3 million shares in its IPO with a par value of $0.001 per share.

The formula to compute the paid-in-capital is as follow:

Paid-in-capital=Number of shares sold×Price per share

Compute the paid-in-capital:

Paid-in-capital=Number of shares sold×Price per share=13.3 milllion×$0.001=$0.0133 milllion

Hence, the paid-in-capital is $0.0133 million.

Summary Introduction

To discuss: Whether the consumer reports review of the Model S boost T Company’s stock due to raise in cash flows or reduction in the risk.

Expert Solution

Explanation of Solution

Determine whether the consumer reports review of the Model S increase T Company’s stock due to raise in cash flows or reduction in the risk:

The Consumer Report review of the Model S can increase T Company’s stock because the review reduces the risk of the company. This Review report minimizes the risk associated with the failure of the products.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation (BRC). Both projects require an annual return of 14 percent. New Submarine Deepwater Fishing Year Ride 0 -$875,000 1 330,000 2 480,000 3 440,000 -$1,650,000 890,000 730,000 590,000 a-1. Compute the IRR for both projects. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Deepwater Fishing Submarine Ride 19.16 % 17.50% a-2. Based on the IRR, which project should you choose? Deepwater Fishing Submarine Ride b-1. Calculate the incremental IRR for the cash flows. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Incremental IRR 14.96 % b-2. Based on the incremental IRR, which project should you choose? Submarine Ride Deepwater Fishing

What is the possibility that cases are not readily bounded but may have blurry definitions? How to address Robert Yin statement and how to resolve the ‘not readily bound’ case? Please help explain.

An investment that is worth $44,600 is expected to pay you $212,205 in X years and has an expected return of 18.05 percent per year. What is X?

Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 7, Problem 1OR

Summary Introduction

To determine: The compound annual return.

Introduction:

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

Expert Solution

Explanation of Solution

Given information:

T Company initial price of the share is $17 and its price increase to $90 after three years. The company has sold 13.3 million shares in its IPO with a par value of $0.001 per share.

The formula to compute the compound annual return is as follows:

Compound annual return=(Amount of increase in share price Initial share price)1Number of years−1

Compute the compound annual return:

Compound annual return=(Amount of increase in share price Initial share price)1Number of years−1=($90$17)13−1=($90$17)0.33333−1=1.7429−1=0.7429 or 74.29%

Hence, the compound annual return is 74.29%.

Summary Introduction

To discuss: The method used to value the shares in year 2013.

Expert Solution

Explanation of Solution

The method used to value the shares in year 2013 is as follows:

Free cash flow valuation model is used to value the shares of the firm without dividend facts. It is because T Company has never paid dividend and they will not pay any dividend in future too. Therefore, free cash flow valuation model is the most suitable to value the firm’s share.

Summary Introduction

To determine: The paid-in-capital recorded in the balance sheet.

Expert Solution

Explanation of Solution

Given information:

T Company initial price of the share is $17 and its price increase to $90 after three years. The company has sold 13.3 million shares in its IPO with a par value of $0.001 per share.

The formula to compute the paid-in-capital is as follow:

Paid-in-capital=Number of shares sold×Price per share

Compute the paid-in-capital:

Paid-in-capital=Number of shares sold×Price per share=13.3 milllion×$0.001=$0.0133 milllion

Hence, the paid-in-capital is $0.0133 million.

Summary Introduction

To discuss: Whether the consumer reports review of the Model S boost T Company’s stock due to raise in cash flows or reduction in the risk.

Expert Solution

Explanation of Solution

Determine whether the consumer reports review of the Model S increase T Company’s stock due to raise in cash flows or reduction in the risk:

The Consumer Report review of the Model S can increase T Company’s stock because the review reduces the risk of the company. This Review report minimizes the risk associated with the failure of the products.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 7, Problem 1OR

Summary Introduction

To determine: The compound annual return.

Introduction:

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

Expert Solution

Explanation of Solution

Given information:

T Company initial price of the share is $17 and its price increase to $90 after three years. The company has sold 13.3 million shares in its IPO with a par value of $0.001 per share.

The formula to compute the compound annual return is as follows:

Compound annual return=(Amount of increase in share price Initial share price)1Number of years−1

Compute the compound annual return:

Compound annual return=(Amount of increase in share price Initial share price)1Number of years−1=($90$17)13−1=($90$17)0.33333−1=1.7429−1=0.7429 or 74.29%

Hence, the compound annual return is 74.29%.

Summary Introduction

To discuss: The method used to value the shares in year 2013.

Expert Solution

Explanation of Solution

The method used to value the shares in year 2013 is as follows:

Free cash flow valuation model is used to value the shares of the firm without dividend facts. It is because T Company has never paid dividend and they will not pay any dividend in future too. Therefore, free cash flow valuation model is the most suitable to value the firm’s share.

Summary Introduction

To determine: The paid-in-capital recorded in the balance sheet.

Expert Solution

Explanation of Solution

Given information:

T Company initial price of the share is $17 and its price increase to $90 after three years. The company has sold 13.3 million shares in its IPO with a par value of $0.001 per share.

The formula to compute the paid-in-capital is as follow:

Paid-in-capital=Number of shares sold×Price per share

Compute the paid-in-capital:

Paid-in-capital=Number of shares sold×Price per share=13.3 milllion×$0.001=$0.0133 milllion

Hence, the paid-in-capital is $0.0133 million.

Summary Introduction

To discuss: Whether the consumer reports review of the Model S boost T Company’s stock due to raise in cash flows or reduction in the risk.

Expert Solution

Explanation of Solution

Determine whether the consumer reports review of the Model S increase T Company’s stock due to raise in cash flows or reduction in the risk:

The Consumer Report review of the Model S can increase T Company’s stock because the review reduces the risk of the company. This Review report minimizes the risk associated with the failure of the products.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 7, Problem 1OR

Summary Introduction

To determine: The compound annual return.

Introduction:

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

Expert Solution

Explanation of Solution

Given information:

T Company initial price of the share is $17 and its price increase to $90 after three years. The company has sold 13.3 million shares in its IPO with a par value of $0.001 per share.

The formula to compute the compound annual return is as follows:

Compound annual return=(Amount of increase in share price Initial share price)1Number of years−1

Compute the compound annual return:

Compound annual return=(Amount of increase in share price Initial share price)1Number of years−1=($90$17)13−1=($90$17)0.33333−1=1.7429−1=0.7429 or 74.29%

Hence, the compound annual return is 74.29%.

Summary Introduction

To discuss: The method used to value the shares in year 2013.

Expert Solution

Explanation of Solution

The method used to value the shares in year 2013 is as follows:

Free cash flow valuation model is used to value the shares of the firm without dividend facts. It is because T Company has never paid dividend and they will not pay any dividend in future too. Therefore, free cash flow valuation model is the most suitable to value the firm’s share.

Summary Introduction

To determine: The paid-in-capital recorded in the balance sheet.

Expert Solution

Explanation of Solution

Given information:

T Company initial price of the share is $17 and its price increase to $90 after three years. The company has sold 13.3 million shares in its IPO with a par value of $0.001 per share.

The formula to compute the paid-in-capital is as follow:

Paid-in-capital=Number of shares sold×Price per share

Compute the paid-in-capital:

Paid-in-capital=Number of shares sold×Price per share=13.3 milllion×$0.001=$0.0133 milllion

Hence, the paid-in-capital is $0.0133 million.

Summary Introduction

To discuss: Whether the consumer reports review of the Model S boost T Company’s stock due to raise in cash flows or reduction in the risk.

Expert Solution

Explanation of Solution

Determine whether the consumer reports review of the Model S increase T Company’s stock due to raise in cash flows or reduction in the risk:

The Consumer Report review of the Model S can increase T Company’s stock because the review reduces the risk of the company. This Review report minimizes the risk associated with the failure of the products.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 7, Problem 1OR

Summary Introduction

To determine: The compound annual return.

Introduction:

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

Expert Solution

Explanation of Solution

Given information:

T Company initial price of the share is $17 and its price increase to $90 after three years. The company has sold 13.3 million shares in its IPO with a par value of $0.001 per share.

The formula to compute the compound annual return is as follows:

Compound annual return=(Amount of increase in share price Initial share price)1Number of years−1

Compute the compound annual return:

Compound annual return=(Amount of increase in share price Initial share price)1Number of years−1=($90$17)13−1=($90$17)0.33333−1=1.7429−1=0.7429 or 74.29%

Hence, the compound annual return is 74.29%.

Summary Introduction

To discuss: The method used to value the shares in year 2013.

Expert Solution

Explanation of Solution

The method used to value the shares in year 2013 is as follows:

Free cash flow valuation model is used to value the shares of the firm without dividend facts. It is because T Company has never paid dividend and they will not pay any dividend in future too. Therefore, free cash flow valuation model is the most suitable to value the firm’s share.

Summary Introduction

To determine: The paid-in-capital recorded in the balance sheet.

Expert Solution

Explanation of Solution

Given information:

T Company initial price of the share is $17 and its price increase to $90 after three years. The company has sold 13.3 million shares in its IPO with a par value of $0.001 per share.

The formula to compute the paid-in-capital is as follow:

Paid-in-capital=Number of shares sold×Price per share

Compute the paid-in-capital:

Paid-in-capital=Number of shares sold×Price per share=13.3 milllion×$0.001=$0.0133 milllion

Hence, the paid-in-capital is $0.0133 million.

Summary Introduction

To discuss: Whether the consumer reports review of the Model S boost T Company’s stock due to raise in cash flows or reduction in the risk.

Expert Solution

Explanation of Solution

Determine whether the consumer reports review of the Model S increase T Company’s stock due to raise in cash flows or reduction in the risk:

The Consumer Report review of the Model S can increase T Company’s stock because the review reduces the risk of the company. This Review report minimizes the risk associated with the failure of the products.

Answer 6

Chapter 7, Problem 1OR

Summary Introduction

To determine: The compound annual return.

Introduction:

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

Expert Solution

Explanation of Solution

Given information:

T Company initial price of the share is $17 and its price increase to $90 after three years. The company has sold 13.3 million shares in its IPO with a par value of $0.001 per share.

The formula to compute the compound annual return is as follows:

Compound annual return=(Amount of increase in share price Initial share price)1Number of years−1

Compute the compound annual return:

Compound annual return=(Amount of increase in share price Initial share price)1Number of years−1=($90$17)13−1=($90$17)0.33333−1=1.7429−1=0.7429 or 74.29%

Hence, the compound annual return is 74.29%.

Answer 7

Chapter 7, Problem 1OR

Summary Introduction

To determine: The compound annual return.

Introduction:

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

Answer 8

Expert Solution

Explanation of Solution

Given information:

T Company initial price of the share is $17 and its price increase to $90 after three years. The company has sold 13.3 million shares in its IPO with a par value of $0.001 per share.

The formula to compute the compound annual return is as follows:

Compound annual return=(Amount of increase in share price Initial share price)1Number of years−1

Compute the compound annual return:

Compound annual return=(Amount of increase in share price Initial share price)1Number of years−1=($90$17)13−1=($90$17)0.33333−1=1.7429−1=0.7429 or 74.29%

Hence, the compound annual return is 74.29%.

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

Summary Introduction

To discuss: The method used to value the shares in year 2013.

Expert Solution

Explanation of Solution

The method used to value the shares in year 2013 is as follows:

Free cash flow valuation model is used to value the shares of the firm without dividend facts. It is because T Company has never paid dividend and they will not pay any dividend in future too. Therefore, free cash flow valuation model is the most suitable to value the firm’s share.

Answer 13

Summary Introduction

To discuss: The method used to value the shares in year 2013.

Answer 14

Expert Solution

Explanation of Solution

The method used to value the shares in year 2013 is as follows:

Free cash flow valuation model is used to value the shares of the firm without dividend facts. It is because T Company has never paid dividend and they will not pay any dividend in future too. Therefore, free cash flow valuation model is the most suitable to value the firm’s share.

Answer 15

Expert Solution

Answer 16

Expert Solution

Answer 17

Expert Solution

Answer 18

Summary Introduction

To determine: The paid-in-capital recorded in the balance sheet.

Expert Solution

Explanation of Solution

Given information:

T Company initial price of the share is $17 and its price increase to $90 after three years. The company has sold 13.3 million shares in its IPO with a par value of $0.001 per share.

The formula to compute the paid-in-capital is as follow:

Paid-in-capital=Number of shares sold×Price per share

Compute the paid-in-capital:

Paid-in-capital=Number of shares sold×Price per share=13.3 milllion×$0.001=$0.0133 milllion

Hence, the paid-in-capital is $0.0133 million.

Answer 19

Summary Introduction

To determine: The paid-in-capital recorded in the balance sheet.

Answer 20

Expert Solution

Explanation of Solution

Given information:

T Company initial price of the share is $17 and its price increase to $90 after three years. The company has sold 13.3 million shares in its IPO with a par value of $0.001 per share.

The formula to compute the paid-in-capital is as follow:

Paid-in-capital=Number of shares sold×Price per share

Compute the paid-in-capital:

Paid-in-capital=Number of shares sold×Price per share=13.3 milllion×$0.001=$0.0133 milllion

Hence, the paid-in-capital is $0.0133 million.

Answer 21

Expert Solution

Answer 22

Expert Solution

Answer 23

Expert Solution

Answer 24

Summary Introduction

To discuss: Whether the consumer reports review of the Model S boost T Company’s stock due to raise in cash flows or reduction in the risk.

Expert Solution

Explanation of Solution

Determine whether the consumer reports review of the Model S increase T Company’s stock due to raise in cash flows or reduction in the risk:

The Consumer Report review of the Model S can increase T Company’s stock because the review reduces the risk of the company. This Review report minimizes the risk associated with the failure of the products.

Answer 25

Summary Introduction

To discuss: Whether the consumer reports review of the Model S boost T Company’s stock due to raise in cash flows or reduction in the risk.

Answer 26

Expert Solution

Explanation of Solution

Determine whether the consumer reports review of the Model S increase T Company’s stock due to raise in cash flows or reduction in the risk:

The Consumer Report review of the Model S can increase T Company’s stock because the review reduces the risk of the company. This Review report minimizes the risk associated with the failure of the products.