According to the recommended procedures under standard VI B Priority of Transaction, there should be restriction on private placements. As the investment mandate of Liang's firm is dividend paying large cap stocks, he should have not invested his own funds (after verifying that company is a good buyRead more
According to the recommended procedures under standard VI B Priority of Transaction, there should be restriction on private placements. As the investment mandate of Liang’s firm is dividend paying large cap stocks, he should have not invested his own funds (after verifying that company is a good buy but not suitable for his clients because it is not a match with its mandate). If any when the company go public, Liang may have the incentive to recommend the stock to his clients regardless of client’s suitability. This will increase the value of his personal portfolio as well.
According to me, Answer should be B i.e. 26.02. Here's the approach for the same - A quintile is a 1/5th part of something i.e. if we have 10 values then there would be 2 group of quintiles each. The formula for fourth quintile will be -([4/5 * {11 (n+1)]) which will be 8.80. Now you have to find thRead more
According to me, Answer should be B i.e. 26.02.
Here’s the approach for the same –
A quintile is a 1/5th part of something i.e. if we have 10 values then there would be 2 group of quintiles each. The formula for fourth quintile will be -([4/5 * {11 (n+1)]) which will be 8.80. Now you have to find the 8th rank among the ascending ordered values and then 0.80 difference will be adjusted for the given portion of value to be taken- – – – 8th rank is 20.65 + 0.80(27.37-20.65) = 26.02.
If we have been given with the forecasted market values or target values, we will always consider those values in the calculation cuz we're ultimately making a decision for the long term, we can not take book values cuz they are not the right representative of the actual market values.
If we have been given with the forecasted market values or target values, we will always consider those values in the calculation cuz we’re ultimately making a decision for the long term, we can not take book values cuz they are not the right representative of the actual market values.
Here, retained earnings of 37.5 percent is like the retention ratio and the other 62.5 percent is the dividend payout ratio. Growth just not depend upon RE but also on other factors too likewise more and more +NPV projects, it has various endogenous and exogenous factors. Here, we are not multiplyinRead more
Here, retained earnings of 37.5 percent is like the retention ratio and the other 62.5 percent is the dividend payout ratio.
Growth just not depend upon RE but also on other factors too likewise more and more +NPV projects, it has various endogenous and exogenous factors.
Here, we are not multiplying dividend with growth rate because question is actually not specifically asserting about dividend growth, this is general growth of company
Option C is correct. Average life of an asset = Accumulated depreciation / annual depreciation Here, The difference in accum. dep between 2000 and 2001 is 0.4 which is depreciation for a year. Therefore, 1.6/0.4 = 4 (Average Age) Average Depreciable Life is nothing but the time an asset take to fullRead more
Option C is correct.
Average life of an asset = Accumulated depreciation / annual depreciation
Here, The difference in accum. dep between 2000 and 2001 is 0.4 which is depreciation for a year.
Therefore, 1.6/0.4 = 4 (Average Age)
Average Depreciable Life is nothing but the time an asset take to fully depreciate. Therefore, for a single year dep = 0.4. Therefore, depreciable life = OC / annual dep = 7
Answer should be B. A is incorrect cuz PCAOB i.e. Public Companies Accounting oversight Board's mission is to oversee the auditors of public companies, protect the interests of investors, and further the public interest in the preparation of informative, accurate, and independent audit reports. C isRead more
Answer should be B.
A is incorrect cuz PCAOB i.e. Public Companies Accounting oversight Board’s mission is to oversee the auditors of public companies, protect the interests of investors, and further the public interest in the preparation of informative, accurate, and independent audit reports.
C is incorrect As financial reporting is how to report certain items on the financial statements which is overlooked by US GAAP and IFRS.
B is correct as SEC’s responsibility is to protect investor’s interest from any malpractices of companies, protect the integrity of the markets – relate with standard 2nd B in Ethics
0.03*4 = 0.12, then 2nd Ln to make it e^x / e^0.12 = 12.74% FV = 1,000,000 * 1.1274 = 1,127,496.852 Had we been compounding it on a daily basis, the method would have been - I/Y = 3/365 (we'll take rate compounded per day) N= 365*4 (We'll now nullify the above statement by making it for 4 years compRead more
0.03*4 = 0.12, then 2nd Ln to make it e^x / e^0.12 = 12.74%
FV = 1,000,000 * 1.1274 = 1,127,496.852
Had we been compounding it on a daily basis, the method would have been –
I/Y = 3/365 (we’ll take rate compounded per day)
N= 365*4 (We’ll now nullify the above statement by making it for 4 years compounded daily)
PV = – 1,000,000
PMT = 0
CPT FV = 1,127,491.29
Answer should be B. We have always been given with the p.a. rate which in case of BDY is 360 day basis given as 5.2%. Compute for the period 120 days by - - (5.20/360) * 120 = 1.733%. Now, Current price / Quoted price / Selling Price are all same since it is quoted in the market to buy/sell at the pRead more
Answer should be B. We have always been given with the p.a. rate which in case of BDY is 360 day basis given as 5.2%. Compute for the period 120 days by –
–
(5.20/360) * 120 = 1.733%.
Now, Current price / Quoted price / Selling Price are all same since it is quoted in the market to buy/sell at the price which will be –
face value – BDY rate = 100,000 – 1.733% = 98,266.66
6 month forward price = 208.18 The borrowing rate is given in p.a. which is 8% per annum. Since the payments of the borrowing has to be monthly, we have to convert the rate on a monthly basis. Therefore - 8% p.a. in a year.....in one month it will become (0.08/12) + 1.....this will be the one monthRead more
6 month forward price = 208.18
The borrowing rate is given in p.a. which is 8% per annum. Since the payments of the borrowing has to be monthly, we have to convert the rate on a monthly basis. Therefore –
8% p.a. in a year…..in one month it will become (0.08/12) + 1…..this will be the one month rate but to specify the monthly compounded rate we have to convert it in monthly compounded basis which will be – (1+ (0.08/12)) ^6.
You have done *6 which is wrong because this is not compounding on a 6 month basis but 6 times something.
Is answer B? Confirm the same. As when a company surges it's borrowing, it's debt to equity ratio which is a representative of company's riskiness. It is very common that the equity shareholders would not be wanting the company to avail more and more loans as it involves a fixed amount of portion goRead more
Is answer B?
Confirm the same. As when a company surges it’s borrowing, it’s debt to equity ratio which is a representative of company’s riskiness. It is very common that the equity shareholders would not be wanting the company to avail more and more loans as it involves a fixed amount of portion going called the interest that company has to pay against taking loan for a tenure specified during the agreement of loan. As an investor of a company I would be wanting to have more cash inflow and less cash outflow. With the same note it would be very risky for the equity shareholders to remain invested in the company, having other factors constant and therefore they will demand a higher return to remain invested in the company since there riskiness has increased which suggest that equity beta has increased. Asset beta on the other hand is the unlevered beta. I don’t think it would be impacted as such.
Ethics and Professional Standards
According to the recommended procedures under standard VI B Priority of Transaction, there should be restriction on private placements. As the investment mandate of Liang's firm is dividend paying large cap stocks, he should have not invested his own funds (after verifying that company is a good buyRead more
According to the recommended procedures under standard VI B Priority of Transaction, there should be restriction on private placements. As the investment mandate of Liang’s firm is dividend paying large cap stocks, he should have not invested his own funds (after verifying that company is a good buy but not suitable for his clients because it is not a match with its mandate). If any when the company go public, Liang may have the incentive to recommend the stock to his clients regardless of client’s suitability. This will increase the value of his personal portfolio as well.
Hope it helps!
See lessOrganising visualising and describing data
According to me, Answer should be B i.e. 26.02. Here's the approach for the same - A quintile is a 1/5th part of something i.e. if we have 10 values then there would be 2 group of quintiles each. The formula for fourth quintile will be -([4/5 * {11 (n+1)]) which will be 8.80. Now you have to find thRead more
According to me, Answer should be B i.e. 26.02.
Here’s the approach for the same –
A quintile is a 1/5th part of something i.e. if we have 10 values then there would be 2 group of quintiles each. The formula for fourth quintile will be -([4/5 * {11 (n+1)]) which will be 8.80. Now you have to find the 8th rank among the ascending ordered values and then 0.80 difference will be adjusted for the given portion of value to be taken- – – – 8th rank is 20.65 + 0.80(27.37-20.65) = 26.02.
Hope it helps!!
See lesscost of capital
If we have been given with the forecasted market values or target values, we will always consider those values in the calculation cuz we're ultimately making a decision for the long term, we can not take book values cuz they are not the right representative of the actual market values.
If we have been given with the forecasted market values or target values, we will always consider those values in the calculation cuz we’re ultimately making a decision for the long term, we can not take book values cuz they are not the right representative of the actual market values.
See lessEquity valuation
Here, retained earnings of 37.5 percent is like the retention ratio and the other 62.5 percent is the dividend payout ratio. Growth just not depend upon RE but also on other factors too likewise more and more +NPV projects, it has various endogenous and exogenous factors. Here, we are not multiplyinRead more
Here, retained earnings of 37.5 percent is like the retention ratio and the other 62.5 percent is the dividend payout ratio.
Growth just not depend upon RE but also on other factors too likewise more and more +NPV projects, it has various endogenous and exogenous factors.
Here, we are not multiplying dividend with growth rate because question is actually not specifically asserting about dividend growth, this is general growth of company
See lessLong lived assets
Option C is correct. Average life of an asset = Accumulated depreciation / annual depreciation Here, The difference in accum. dep between 2000 and 2001 is 0.4 which is depreciation for a year. Therefore, 1.6/0.4 = 4 (Average Age) Average Depreciable Life is nothing but the time an asset take to fullRead more
Option C is correct.
Average life of an asset = Accumulated depreciation / annual depreciation
Here, The difference in accum. dep between 2000 and 2001 is 0.4 which is depreciation for a year.
Therefore, 1.6/0.4 = 4 (Average Age)
Average Depreciable Life is nothing but the time an asset take to fully depreciate. Therefore, for a single year dep = 0.4. Therefore, depreciable life = OC / annual dep = 7
See lessFunction of SEC
Answer should be B. A is incorrect cuz PCAOB i.e. Public Companies Accounting oversight Board's mission is to oversee the auditors of public companies, protect the interests of investors, and further the public interest in the preparation of informative, accurate, and independent audit reports. C isRead more
Answer should be B.
A is incorrect cuz PCAOB i.e. Public Companies Accounting oversight Board’s mission is to oversee the auditors of public companies, protect the interests of investors, and further the public interest in the preparation of informative, accurate, and independent audit reports.
C is incorrect As financial reporting is how to report certain items on the financial statements which is overlooked by US GAAP and IFRS.
B is correct as SEC’s responsibility is to protect investor’s interest from any malpractices of companies, protect the integrity of the markets – relate with standard 2nd B in Ethics
See lessCONTINOUS COMPOUNDING- HOW TO SOLVE THIS?
0.03*4 = 0.12, then 2nd Ln to make it e^x / e^0.12 = 12.74% FV = 1,000,000 * 1.1274 = 1,127,496.852 Had we been compounding it on a daily basis, the method would have been - I/Y = 3/365 (we'll take rate compounded per day) N= 365*4 (We'll now nullify the above statement by making it for 4 years compRead more
0.03*4 = 0.12, then 2nd Ln to make it e^x / e^0.12 = 12.74%
FV = 1,000,000 * 1.1274 = 1,127,496.852
Had we been compounding it on a daily basis, the method would have been –
I/Y = 3/365 (we’ll take rate compounded per day)
N= 365*4 (We’ll now nullify the above statement by making it for 4 years compounded daily)
PV = – 1,000,000
PMT = 0
CPT FV = 1,127,491.29
the difference comes up here with approax of $ 6.
Thanks!
See lessTYPES OF YIELD
Answer should be B. We have always been given with the p.a. rate which in case of BDY is 360 day basis given as 5.2%. Compute for the period 120 days by - - (5.20/360) * 120 = 1.733%. Now, Current price / Quoted price / Selling Price are all same since it is quoted in the market to buy/sell at the pRead more
Answer should be B. We have always been given with the p.a. rate which in case of BDY is 360 day basis given as 5.2%. Compute for the period 120 days by –
–
(5.20/360) * 120 = 1.733%.
Now, Current price / Quoted price / Selling Price are all same since it is quoted in the market to buy/sell at the price which will be –
face value – BDY rate = 100,000 – 1.733% = 98,266.66
See lessInteresr pa comp monthly calculation
6 month forward price = 208.18 The borrowing rate is given in p.a. which is 8% per annum. Since the payments of the borrowing has to be monthly, we have to convert the rate on a monthly basis. Therefore - 8% p.a. in a year.....in one month it will become (0.08/12) + 1.....this will be the one monthRead more
6 month forward price = 208.18
The borrowing rate is given in p.a. which is 8% per annum. Since the payments of the borrowing has to be monthly, we have to convert the rate on a monthly basis. Therefore –
8% p.a. in a year…..in one month it will become (0.08/12) + 1…..this will be the one month rate but to specify the monthly compounded rate we have to convert it in monthly compounded basis which will be – (1+ (0.08/12)) ^6.
You have done *6 which is wrong because this is not compounding on a 6 month basis but 6 times something.
Hope it helps.
Cost of Capital – Beta
Is answer B? Confirm the same. As when a company surges it's borrowing, it's debt to equity ratio which is a representative of company's riskiness. It is very common that the equity shareholders would not be wanting the company to avail more and more loans as it involves a fixed amount of portion goRead more
Is answer B?
Confirm the same. As when a company surges it’s borrowing, it’s debt to equity ratio which is a representative of company’s riskiness. It is very common that the equity shareholders would not be wanting the company to avail more and more loans as it involves a fixed amount of portion going called the interest that company has to pay against taking loan for a tenure specified during the agreement of loan. As an investor of a company I would be wanting to have more cash inflow and less cash outflow. With the same note it would be very risky for the equity shareholders to remain invested in the company, having other factors constant and therefore they will demand a higher return to remain invested in the company since there riskiness has increased which suggest that equity beta has increased. Asset beta on the other hand is the unlevered beta. I don’t think it would be impacted as such.
Please provide the answer to confirm the same
See less