:Help me answer these questions.

Company Q's current return on equity (ROE) is 14%. It pays out 50 percent of earnings as cash dividends (payout ratio = 0.50). Current book value per share is $65. Book value per share will grow as Q reinvests earnings.

Assume that the ROE and payout ratio stay constant for the next four years. After that, competition forces ROE down to 11.5% and the payout ratio increases to 0.70. The cost of capital is 11.5%.

a. What are Q's EPS and dividends in years 1, 2, 3, 4, and 5?

QUESTION 1

The current account balance equals:

net exports of goods and services + net primary income + net secondary income.

exports of goods + imports of goods + net primary income + net secondary income.

exports of services - imports of services + net primary income + net secondary income.

exports of goods and services + net primary income + net secondary income.

exports of services - imports of services + balance of trade on goods and services + net secondary income.

1 points

QUESTION 2

Which of the following is not a source of demand for the Australian dollar?

A German firm that wants to purchase agricultural products from Australia.

An Indian financier who wants to buy an Australian bond.

An Australian bank that wants to buy a Japanese bond.

A French consumer who wants to buy Australian electronics.

A currency trader who thinks the value of the Australian dollar will be greater in the future relative to the value today.

1 points

QUESTION 3

If CAB = current account balance, I = private sector investment, S = national saving and NX = net exports, then:

I = CAB - S.

CAB + I = S.

CAB + NX = S.

CAB = I + NX.

CAB = I + NX + S.

1 points

QUESTION 4

In Australia, substantial foreign debt causes large interest repayments. this will increase:

future current account deficits.

net secondary income.

balance of payments deficit.

trade surplus.

financial account deficit.

1 points

QUESTION 5

In an open economy, monetary policy, in the short run, has:

no impact on aggregated demand.

a larger impact on aggregate demand as compared to a closed economy.

an impact on aggregate demand as well as aggregate supply.

a smaller impact on aggregate demand as compared to a closed economy.

the same impact on aggregate demand as compared to a closed economy.

1 points

QUESTION 6

Which of the following statements regarding the Reserve Bank of Australia's inflation targeting practice is false?

It allows the inflation rate to temporarily go outside the target band.

It has an official inflation target of 2-3% CPI inflation.

It does not focus much on temporary price fluctuations of individual items.

It has an official inflation target of 2-3% headline inflation.

It has an official inflation target of 2-3% underlying inflation.

1 points

QUESTION 7

xid-18093240_1

In the graph above, an economy moves from point A to B after being hit by a shock. if the Central Bank wants to keep the unemployment rate at its natural level, what action should it take?

Raise the cash rate.

Buying bonds from banks.

Selling bonds to banks.

None of the above.

1 points

QUESTION 8

Bank A has $50 million in total assets and $30 million in total liabilities. $30 million worth of loans are written off because they cannot be repaid to Bank A. Which of the following scenarios would be most desirable for a depositor who wants to retain their savings?

Bank A goes into liquidation.

Bank A receives a bail-out.

Bank A continues operating.

Bank A takes out a $30 million loan from Bank B.

Bank A receives a bail-in.

1 points

QUESTION 9

As of June 2019, Australia has a total population of 25.2m and 20.6m are 15+ years-old. The unemployed population is 0.7m and the employed population is 12.9m.

Using these figures, what is the unemployment rate in Australia for June 2019?

5.43%

5.15%

5.74%

3.40%

2.78%

1 points

QUESTION 10

The economy is initially at its long-run equilibrium. A diplomatic dispute with its trading partner countries now leads to a decline in its exports.

In the short run, the aggregate demand curve shifts right. In the long run, the price level increases, the output returns to its potential, and real wages increase.

In the short run, the aggregate demand curve shifts right. In the long run, the price level increases, the output returns to its potential, and real wages decrease.

In the short run, the aggregate demand curve shifts left. In the long run, the price level decreases, the output returns to its potential, and real wages decrease.

In the short run, the aggregate demand curve shifts left. In the long run, the price level decreases, the output returns to its potential, and real wages do not change.

In the short run, the aggregate demand curve shifts right. In the long run, the price level increases, the output returns to its potential, and real wages do not change.

1 points

QUESTION 11

The government increases unemployment benefits by $1 million and funds it entirely by raising taxes. The absolute value of the government purchases multiplier is 3 and that of the tax multiplier is 2. What is the impact on GDP?

GDP does not change

GDP increases by $3 million

GDP decreases by $1 million

GDP decreases by $3 million

GDP increases by $1 million

Let X, =e, +en_2 be an MA(2) process where e,, -- N(0,1). (i) Calculate P(X,, 20 1,_, $0). (ii) Compare your answer to (i) with P(X, 20 X,_ 50, X,-2=0) and hence comment on whether the process is Markov.The government of a country suffering from hyperinflation has sponsored an economist to monitor the price of a "basket" of items in the population's staple diet over a one-year period. As part of his study, the economist selected six days during the year and on each of these days visited a single nightclub, where he recorded the price of a pint of lager. His report showed the following prices: Day (i ) 8 29 57 92 141 148 Price ( P;) 15 17 22 51 88 95 In P 2.7081 2.8332 3.0910 3.9318 4.4773 4.5539 [i= 475 [i =54,403 [InP, = 21.5953 _(InP,)2 = 81.1584 Liln P; = 1,947.020 The economist believes that the price of a pint of lager in a given bar on day i can be modelled by: In P, = a + bite; where a and b are constants and the e; 's are uncorrelated M(0,o') random variables. (i) Estimate a , b and oz. [5] (ii) Calculate the linear correlation coefficient r. [1] (iii) Obtain a 99% confidence interval for b . [2] (iv) Determine a 95% confidence interval for the average price of a pint of lager on day 365: (a) in the country as a whole (b) in a randomly selected bar. [7] [Total 151