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

1. Give one new distribution channels for Virtual Assistance (freelance business) that is not commonly used. - show a chart/diagram to illustrate the flow of the distribution channels. - explain the rationale behind it. (e.g., increased market reach, improved customer experience, cost-efficiency). - connect the given distribution channel to the marketing mix: (How does it align with the overall marketing strategy? Consider product, price, promotion, and place.). - define the target audience: (Age, gender, location, interests, etc.). - lastly, identify potential participants: (Wholesalers, retailers, online platforms, etc.)

An individual is planning for retirement and aims to withdraw $100,000 at the beginning of each year, starting from the first year of retirement, for an expected retirement period of 20 years. To fund this retirement plan, he intends to make 20 equal annual deposits at the end of each year during his working years. Assume a simple annual interest rate of 20% during his working years and a simple annual interest rate of 5% during retirement. What should his annual deposit amount be to achieve his desired retirement withdrawals? Please write down the steps of your calculation and explain result economic meaning.

Assume an investor buys a share of stock for $18 at t=0 and at the end of the next year (t=1), he buys 12 shares with a unit price of $9 per share. At the end of Year 2 (t=2), the investor sells all shares for $40 per share. At the end of each year in the holding period, the stock paid a $5.00 per share dividend. What is the annual time-weighted rate of return? Please write down the steps of your calculation and explain result economic meaning.

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.