This topic contains a solution. Click here to go to the answer

Author Question: Brown Inc needs to borrow 250,000 for the next 6 months. The company has a line of credit with a ... (Read 81 times)

HudsonKB16

  • Hero Member
  • *****
  • Posts: 535
Brown Inc needs to borrow 250,000 for the next 6 months. The company has a line of credit with a
  bank that allows the company to borrow funds with an 8 interest rate subject to a 20 of loan
  compensating balance.
 
  Currently, Brown Inc has no funds on deposit with the bank and will need
  the loan to cover the compensating balance as well as their other financing needs. What is the
  annual percentage rate for this financing assuming discounted interest?
  A) 14.29 B) 11.67 C) 10.53 D) 12.98

Question 2

Cherry Auto Sales just opened and does not expect to pay a dividend during its first year. At the end of its second year, Cherry's owners expect to pay a 2.00 dividend and plan to increase it 7 annually.
 
  If the required return is 20, what should Cherry's stock price be?
  A) 11.42
  B) 10.92
  C) 13.06
  D) 12.82
  E) 15.48



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

potomatos

  • Sr. Member
  • ****
  • Posts: 338
Answer to Question 1

C

Answer to Question 2

D




HudsonKB16

  • Member
  • Posts: 535
Reply 2 on: Jul 10, 2018
:D TYSM


nanny

  • Member
  • Posts: 313
Reply 3 on: Yesterday
Wow, this really help

 

Did you know?

Sperm cells are so tiny that 400 to 500 million (400,000,000–500,000,000) of them fit onto 1 tsp.

Did you know?

Human neurons are so small that they require a microscope in order to be seen. However, some neurons can be up to 3 feet long, such as those that extend from the spinal cord to the toes.

Did you know?

Asthma cases in Americans are about 75% higher today than they were in 1980.

Did you know?

Most strokes are caused when blood clots move to a blood vessel in the brain and block blood flow to that area. Thrombolytic therapy can be used to dissolve the clot quickly. If given within 3 hours of the first stroke symptoms, this therapy can help limit stroke damage and disability.

Did you know?

About 3% of all pregnant women will give birth to twins, which is an increase in rate of nearly 60% since the early 1980s.

For a complete list of videos, visit our video library