Calculate the value of a preferred stock that pays an annual dividend of $4.00 a share and answer whether it should be purchased if it costs $58.00:
(1) If the competitive yield is 6.4%, what is the value of the preferred stock AND should it be purchased?
Answers
(1) If the competitive yield is 6.4%, the value of the preferred stock is $62.50, and it should be purchased as the cost is lower.
(2) If the competitive yield is 8.0%, the value of the preferred stock is $50.00, and it should not be purchased as the cost is higher.
To calculate the value of a preferred stock, we can use the dividend discount model (DDM). The formula for valuing preferred stock using DDM is:
Value of Preferred Stock = Dividend / Required Yield
(1) If the competitive yield is 6.4%:
Dividend = $4.00 (annual dividend)
Required Yield = 6.4% or 0.064
Value of Preferred Stock = $4.00 / 0.064 = $62.50
Since the preferred stock cost $58.00, which is lower than the calculated value of $62.50, it should be purchased.
(2) If the competitive yield is 8.0%:
Dividend = $4.00 (annual dividend)
Required Yield = 8.0% or 0.08
Value of Preferred Stock = $4.00 / 0.08 = $50.00
Since the preferred stock costs $58.00, which is higher than the calculated value of $50.00, it should not be purchased.
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The complete question is:
Calculate the value of a preferred stock that pays an annual dividend of $4.00 a share and answer whether it should be purchased if it costs $58.00:
(1) If the competitive yield is 6.4%, what is the value of the preferred stock AND should it be purchased?
(2) If the competitive yield is 8.0%, what is the value of the preferred stock AND should it be purchased?
Related Questions
Which of the following assigns a value to the hourlyWage member of employee[2]?
A) employee[2]->hourlyWage = 50.00;
B) employee2.hourlyWage = 7.50;
C) hourlyWage[2].employee = 29.75
D) employee[2].hourlyWage = 100.00;
E) None of these
Answers
Employee[2].hourly Wage = 100.00 is the correct value in this case.
Hence, Option D is correct
First, calculate the total number of hours worked by multiplying the number of weeks in a year by 52. Divide this figure by the annual salary. For example, if an employee earns $50,000 per year and works 40 hours per week, his or her hourly rate is $50,000/2,080 (40 x 52) = $24.04.The hourly rate. noun [C] WORKPLACE, HUMAN RESOURCES. the sum of money charged, paid, or earned for each hour worked: Rather than paying for the products that the advisers sell you, you pay a fixed or hourly rate for their time. Salaries are fixed payments that are usually calculated on an annual basis. Hourly pay is based on an agreed-upon hourly rate.To know more about hourly rate here
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If 60% of the population is female and 30% of females buy physical therapy services, and 70% of men buy physical therapy services, is there more demand for physical therapy from women or men?
a. women
b. men
Answers
Answer:
Men.
Explanation:
Well, 70% of 40% (100% - 60%) = 28% total population demand.
30% of 60% = 18%
28% > 18%
Answer:
Men
Explanation:
Let the number of men and female be 100
60% of 100 is 60
Therefore there are 60 female
30% of 60 is 18
so 18 women buy physical therapy
40% of 100 is 40
Therefore there are 40 men
70% of 40 is 28
so 28 men buy physical therapy
28>18 therefore there is a greater demand of physical therapy from men
Contribution margin is:
A) Revenues divided by fixed costs
B) Revenues minus variable cost
C) Revenues plus variable cost
D) Net Sales
E) None of these
Answers
The correct answer for the definition of contribution margin is B) Revenues minus variable costs.
Contribution margin is the amount of revenue that remains after deducting the variable costs associated with the production or sale of a product. It is a useful tool for determining the profitability of individual products or services, as it helps to assess the amount of revenue that contributes towards covering the fixed costs of a business.
By calculating the contribution margin, a business can determine the level of sales volume required to break even or generate a profit. This information is important for making strategic decisions regarding pricing, cost management, and product mix.
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On january 1, 2019, quenneville corporation sold equipment to wirtz, inc., for $500,000. the equipment had cost $300,000 to manufacture. the contract with wirtz requires quenneville to provide complete maintenance and repair services on the equipment for 5 years. quenneville's cost to provide the services are $10,000 per year.
Answers
Answer:
1. Total revenue recognized in 2019 is $428,000.
2. Earnings before tax in 2019 is $118,000.
Explanation:
The missing question are as follows
"Quenneville sells the 5-year maintenance and repair services contracts separately for $90,000. Quenneville uses the residual approach to allocate the $500,000 transaction price between the two performance obligations: delivery of the equipment and the maintenance and repair services.
1. What amount of revenue does Quenneville report in 2019
2. What amount of earning before tax does Quenneville report in 2019"
Solution
1. Calculation of the total revenue recognized in 2019
Particulars Amount
Standalone selling price for equipment $410,000
($500,000 - $90,000)
Add: Standalone selling price of 5 years $18,000
maintenance and repair contract
($90,000 / 5 years)
Total revenue recognized in 2019 $428,000
2. Calculation of earnings before tax in 2019
Particular Amount
Total revenue recognized in 2019 $428,000
Less: Total expenses $310,000
($300,000 + $10,000)
Earning before tax in 2019 $118,000
The total estimated cost of attending a public two-year college in Hasani’s home town last year was $2,265. The cost of attending the college is expected to increase 5% annually. Hasani plans to enter the college this year and attend for 2 years. Which is the best estimate for the total cost Hasani will pay for only his second year? $2,270.66 $2,275.00 $2,491.50 $2,497.16
Answers
Answer: Hi there! For this question, we will be compounding, because the cost of going of going to college goes up by 5% each year. The formula for compounding is P(1 + r)^t, where P = starting amount, r = rate, and t = time in years. First, let's add 5% (0.05) to 1. 1 + 0.05 is 1.05. We are talking about how much Hasani will have to pay in his second year. We will raise that number to the 2nd power. 1.05^2 is 1.1025. Now, we will multiply that number by2,265 to find the amount. When we multiply both numbers, we get 2,497.1625 or 2,497.16 when rounded to the nearest hundredth. There. Hasani will pay an estimated cost of $2,497.16. The answer is D.
Answer:
D
Explanation:
karume starts his own business as a sole proprietor. this form of business has the advantage of .
Answers
Karume starts his own business as a sole proprietor. The advantage of this type of business is that he will get all the profits of the business and he is the sole owner of the business.
What is a business?A business is an organization that engages in commercial, industrial, or professional activities with the aim of earning a profit.
The primary objective of most businesses is to create and deliver products or services that meet the needs or wants of their customers while generating revenue and profits for the owners or shareholders.
Th business that Karume start is sole proprietorship. He gets all the profits of the business by himself and he is the only owner of the business.
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if logan said he won the fight.
KSI fans:lets check his monthly spotify listeners
Answers
Answer:
xxxxxxxxxxxxxxxxxxx Vetty funny bro
Explanation:
Julie and Kristen are partners in a local sporting good store. They needed $51,000 to start the
business. They invested in the ratio of 3:10 respectively. How much money did each invest?
What percent is owned by Kristen?
Answers
3eyy1ggh mi y
1uj gyrju3hxif2 2x ce I I b I 6x9
3/10=x/51000
X=15,300, Julie
51,000-15,300
35,700, Kristen
70% is owned by Kristen
Dawn walks into a customer's office with her sales presentation planned and immediately recognizes that the customer is upset about something. In this situation, Dawn should Dawn walks into a customer's office with her sales presentation planned and immediately recognizes that the customer is upset about something. In this situation, Dawn should:
a. maintain a happy and cheerful demeanor.
b. sit down immediately and begin the presentation.
c. All of the answers are correct.
d. say something funny in an attempt to lighten the customer's mood.
e. ask if she should come back some other time for the meeting.
Answers
Suppose that a firm acts as a local monopolist that sells tobacco. The monopolist faces a local demand given by: QD = 100 - 4p This firm also has a cost structure given by: MC = =/=/e The firm has zero fixed costs. 6. What is the firm's Marginal Revenue curve as a function of Q? [2 points] 7. What is the profit-maximizing quantity for this monopolist to produce and what price does it set? Show your work. [4 points] Now suppose that the government steps in to regulate this monopolist, and imposes a price ceiling of $15 for this monopolist. Hint: We have not gone over this in lecture, but you should think carefully about what the monopolist's Marginal Revenue curve will look like now if it cannot set a price above $15. 8. Now, what is the firm's Marginal Revenue curve as a function of Q? [2 points] 9. Draw a figure here that includes the demand curve, marginal cost (MC), marginal revenue (MR), and original choice of production (answer to part 1). As always, keep quantity on the x-axis and price on the y-axis. Label all intercepts. [2 points] 10. At what quantity will this new regulated monopolist choose to produce? Show your work. [2 point] 11. What happens to both profits and consumer surplus in this case? If they change, by how much? Show your work. [HINT: To do this, you will need to calculate the old CS & PS under the unregulated monopoly, and then the new CS & PS with the price ceiling.]
Answers
However, without the MC function and the exact quantities, we cannot calculate the changes in profits and consumer surplus.
What is the firm's Marginal Revenue curve as a function of quantity (Q)?The firm's marginal revenue (MR) curve as a function of quantity (Q) can be derived from the demand equation.
Since the firm is a monopolist, it faces the entire market demand. To find MR, we need to calculate the derivative of the total revenue (TR) function with respect to Q.Given that TR = Q * p (total revenue equals quantity multiplied by price), we can express price (p) in terms of quantity (Q) using the demand equation: p = (100 - QD)/4.
Substituting p into the TR equation: TR = Q * [(100 - QD)/4]Now, differentiate TR with respect to Q to find MR: MR = d(TR)/d(Q)MR = d(Q * [(100 - QD)/4]) / d(Q)MR = (100 - 2QD - Q * d(QD)/d(Q))/4Simplifying further, we get: MR = (100 - 2QD - Q * (-4))/4MR = (100 + 4Q - 2QD)/4Therefore, the firm's marginal revenue curve as a function of Q is: MR = (100 + 4Q - 2QD)/4
To determine the profit-maximizing quantity for the monopolist and the corresponding price, we need to find the level of output where marginal revenue equals marginal cost (MC). Since the cost structure is not provided, we can't calculate MC, and therefore, we cannot determine the profit-maximizing quantity and price.With the government-imposed price ceiling of $15, the firm cannot set a price above that level. As a result, the marginal revenue (MR) curve will coincide with the price ceiling of $15.
The MR curve will be a horizontal line at $15 for all quantities.Please note that as a text-based AI model, I am unable to draw a figure. However, you can draw a graph with the x-axis representing quantity and the y-axis representing price.Label the intercepts of the demand curve, marginal cost (MC), and the original choice of production. Additionally, plot the marginal revenue (MR) curve as a horizontal line at the price level corresponding to the monopolist's original choice of production.
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the theory of reciprocal demand best applies when two countries are of equal economic size, so that the demand conditions of each nation have a noticeable impact on market prices. (T/F)
Answers
The statement " the theory of reciprocal demand best applies when two countries are of equal economic size, so that the demand conditions of each nation have a noticeable impact on market prices. " is true because it involves two companies.
By outlining the prerequisites for equilibrium terms of trade, J.S. Mill made Ricardo's theory of comparative costs determinate. The maximum distance at which profitable international trade can occur is determined by the comparative cost differences between the nations. It does not specify where actual international trade will occur in the space between the limits. The answer to this question is provided by Mill.
To explain how the equilibrium terms of trade are actually determined, J. S. Mill proposed the theory of reciprocal demand or the law of international values.
He asserted that the equation of reciprocal demand determines the equilibrium terms of trade. Reciprocal demand refers to the relative potency and elasticity of the two trading nations' demand for one another's products in relation to their own products.
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To examine
the weekly payroll of all employees, one would look at the:
Answers
To examine the weekly payroll of all employees, one would look at the: d. payroll register.
What is the payroll register?The payroll register is a book or record that is used to fill in the details of all the employees and their payment logs. A record of this register is often kept in good condition in case of any future discrepancies that will have to be resolved.
A person who wants to examine the weekly payroll of all employees in an organization must be able to look at the payroll register to know what is obtainable. There, he would find the names of the employees, their job roles and payment record.
Options:
a. W-4
b. employee earnings record
c. W-2
d. payroll register.
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I will mark brainliest Which of the following terms directly relate to business? (Select all correct answers.)
1. manufacturer
2. oracular
3. naturalist
4. retailer
Answers
Answer:
1. manufacturer
4. retailer
Explanation:
The manufacturer refers to a company that produces goods and services in a factory or plant for sale. The term manufacturer may also mean the owners of such a factory. A manufacturer converts raw materials to finished products and sells them for a profit. They are involved in a business.
A retailer is a business person who sells goods to consumers. Retailers buy from other businesses such as wholesalers. Large scale retailers such as supermarkets and departmental stores buy from manufacturers.
Answer:
It's manufacturer and retailer
Explanation:
I took a quiz with the same question and I got it correct, so you can rely on my answer.
Experiential marketing typically involves: A) providing samples to individuals through social media, B) a combination of guerrilla and buzz marketing tactics. C) generating buzz about a unique marketing event. D) direct response marketing through interactive means, such as special events and free samples.
Answers
In order to create buzz about a special marketing event, experiential marketing often combines guerilla and buzz marketing strategies (Options B and C).
By constructing immersive and engaging experiences that connect with customers on a personal level, it goes beyond conventional advertising techniques. The goal of experiential marketing is to create strong emotional bonds with the brand. Live events, pop-up shops, branded installations, product displays, and interactive campaigns can all be a part of it. While Option A's distribution of samples via social media and Option D's interactive direct response marketing can both be a part of an experiential marketing plan, they do not cover the entire spectrum of strategies normally used in experiential marketing.
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Determine whether you have enough monies to live comfortably each year for 20 years in your dream state of Oregon.
Assume you are at age 65 and have the following assets:
Pension Plan worth $375,000. You plan to take an ordinary annuity on your pension to withdraw all assets in 20 years. Assume 4. 5% interest per year. You will get monthly payments for 20 years.
Social Security - $27,600 per year for 20 years. Assume that this is the amount you will receive each year.
Savings worth $140,000. You plan to take an ordinary annuity to withdraw all assets in 20 years. Assume 4. 25% interest per year. You will get monthly payments for 20 years.
Answer the following questions:
What will be the monthly amount received individually from the pension plan, social security, and savings? What will be the monthly total? Round all 4 answers to the nearest penny.
What will be the yearly amount received individually from the pension plan, social security, and savings? What will be the yearly total? Round all 4 answers to the nearest dollar.
What will be the 20-year amounts received individually from the pension plan, social security, and savings? What will be the 20-year total amount? Round all 4 answers to the nearest dollar.
Is the total amount enough to retire comfortably in your dream state of Oregon? What are your plans to make the required savings now and/or in the future to live comfortably in your dream state? Explain
Answers
The given information is insufficient to provide specific calculations for the monthly, yearly, and 20-year amounts received individually from the pension plan, social security, and savings. However, with the provided information about the assets and their respective interest rates, it is possible to make some general observations. To determine the exact amounts, the formulas for calculating annuity payments would need to be applied.
In terms of retirement planning, it is important to consider various factors to assess whether the total amount received is enough to live comfortably in Oregon for 20 years. Factors such as living expenses, inflation, healthcare costs, and personal preferences need to be taken into account. It is recommended to create a detailed retirement budget that includes all expected expenses and compare it to the projected income from the pension plan, social security, and savings. This will help determine if the income is sufficient to cover living expenses and maintain a comfortable lifestyle.
If the total amount falls short of the desired retirement income, additional savings and investments may be necessary. Individuals can consider options such as contributing to retirement accounts (e.g., 401(k), IRA), investing in stocks or bonds, or exploring other income-generating opportunities. Working with a financial advisor can provide valuable guidance in developing a comprehensive retirement plan and making the necessary savings and investment decisions.
Ultimately, the ability to retire comfortably in Oregon depends on personal financial goals, lifestyle choices, and the level of financial security one desires. It is crucial to regularly review and adjust the retirement plan as circumstances change to ensure a comfortable and secure retirement.
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If Kaylee has 5 followers on Pinterest and she adds one more, how many does she have?
Answers
Answer:
6
Explanation:
Answer:
6
Explanation:
I really need help with this asap
Answers
ECON QUESTION !!
What is the overall objective of a business raising financial capital?(1 point)
A) decrease operating costs and increase the number of investors
B) increase revenues and the number of investors
C) reducing financial obligations and increase revenue
D) grow and increase profit
chapter 5 test, banking and finance...if you have all the answers that would be greatly appreciated
Answers
The main goal is to increase shareholder value as much as possible.
Businesses frequently make decisions that include spending money now while planning to turn a profit later. Examples are when a business purchases a machine with a 10-year lifespan, constructs a new facility with a 30-year lifespan, or launches a research and development initiative. Four basic methods exist for businesses to obtain the funding they require to fund these initiatives: (1) early-stage investors; (2) profit reinvestment; (3) bank or bond borrowing; and (4) stock sales. Business owners decide how to pay for financial capital sources when they select those sources.
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Abardeen corporation borrowed $90,000 from the bank on october 1, year 1. The note had an 8 percent annual rate of interest and matured on march 31, year 2. Interest and principal were paid in cash on the maturity date. Required a. What amount of cash did abardeen pay for interest in year 1? b. What amount of interest expense was recognized on the year 1 income statement? c. What amount of total liabilities was reported on the december 31, year 1, balance sheet? d. What total amount of cash was paid to the bank on march 31, year 2, for principal and interest? e. What amount of interest expense was reported on the year 2 income statement?.
Answers
a) The amount of cash that Abardeenn Corporation paid for interest in year 1 is $0.
b) The amount of interest expense recognized on the year 1 income statement is $1,800 ($90,000 x 8% x 3/12).
c) The amount of total liabilities reported on the December 31, year 1 balance sheet is $91,800 ($90,000 + $1,800).
d) The total amount of cash paid to the bank on March 31, Year 2, for principal and interest is $93,600 ($90,000 + ($90,000 x 8% x 6/12).
e) The amount of interest expense reported on the year income statement is $1,800 ($90,000 x 8% x 3/12).
How is interest calculated?Interest can be computed by applying the interest rate to the amount of notes payable based on the period under coverage.
For example, the interest amount for a six month is not the same as the interest amount for a full year, as interests are always prorated.
Data and Calculations:Amount of Note Payable = $90,000
Annual interest rate = 8%
Maturity date = March 31, Year 2
Maturity period = 6 months
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Peggy started work after graduation and started investing.
Why do you think Peggy would have decided to invest?
A. to keep her finances liquid for emergencies
B. to earn compound interest
C. to minimize the risk of losing money
D. to build on her retirement fund
E. to take out a student loan for further education
Answers
Answer:
c
Explanation:
Highschool students still don’t know what to do after graduation and may lead to debt after
the firm repurchases shares from a major shareholder through private discussions. this is an example of: an open-market transaction a tender offer transaction a direct negotiation transaction
Answers
An open-market transaction is when a firm repurchases shares from any investor on the open market. It is usually done through a stock exchange and the terms of the transaction are set by the market conditions.
A tender offer transaction is when the firm makes a public offer to buy back a certain amount of shares from the shareholders at a certain price.
This is usually done at a price higher than the market price and the shareholders have to decide whether to accept the offer or not. A direct negotiation transaction is when the firm repurchases shares from a major shareholder through private discussions.
The terms of the transaction are negotiated between the two parties and the price may not be the same as the market price.
This is usually done to avoid any disruption to the market. In this type of transaction, the major shareholder may have an advantage as they can negotiate a better price than the market price.
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how long can a bankruptcy remain on a credit report?
Answers
What might be an example of corporate social responsibility
Answers
funding water conservation technologies.
An example of corporate social responsibility is funding for planting trees in the city or country.
What is corporate social responsibility?Corporate social responsibility is kind of a social responsibility of business owners and organizations towards the betterment of the society and environment. There are many ways to fulfill corporate social responsibility, such as planting trees, giving jobs to the underprivileged, funding for water and sanitation facilities, and many more.
At present times, this act of corporate social responsibility is being taken really seriously by business people, and they are fulfilling this responsibility with great zeal. There are dedicated departments in organizations that look after these activities.
Thus, planting trees is one example of corporate social responsibility.
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product a's annual inventory turnover rate is 10 and product b's annual turnover rate is 15. which product spends more time in inventory on average?
Answers
A higher turnover rate suggests that product B is sold and replaced more frequently than product A, indicating a shorter average time spent in inventory.
To determine which product spends more time in inventory on average, we can use the concept of the inventory turnover ratio. The inventory turnover ratio measures the number of times a company sells and replaces its inventory within a given period. The formula for calculating the inventory turnover ratio is: Inventory Turnover Ratio = Cost of Goods Sold / Average InventoryFrom the information given, we know the inventory turnover rates for products A and B, but we don't have the specific values for cost of goods sold or average inventory. Therefore, we cannot determine the exact time spent in inventory for each product.
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What is a major function of the public sector
Answers
Answer:
Public sector provides many services such as; education, health and social care.
The article Foundational perspective for ethical and socially responsible marketing decisions" (Murphy et al. , 2017),
Answers
The article "Foundational perspective for ethical and socially responsible marketing decisions" (Murphy et al., 2017) provides valuable insights into the importance of ethical and socially responsible marketing practices.
The article by Murphy et al. (2017) focuses on providing a foundational perspective for ethical and socially responsible marketing decisions.
This is achieved by discussing various aspects of ethical marketing, including the importance of moral philosophy, ethical decision-making models, and marketing ethics theories. The authors emphasize the need for marketing professionals to be aware of the ethical implications of their decisions and to strive for a more responsible and sustainable approach to marketing. The authors argue that these practices should be integrated into every aspect of a company's operations, from product development to advertising and communication strategies. They suggest that companies should adopt a long-term perspective and focus on building strong relationships with their customers based on trust, transparency, and social responsibility. The article also highlights the need for companies to take into account the broader social and environmental impacts of their actions and to work towards creating a sustainable future for all stakeholders. Overall, the article provides a useful framework for companies looking to develop more ethical and socially responsible marketing strategies.In summary, Murphy et al.'s (2017) article highlights the importance of considering ethical and social responsibility when making marketing decisions. It provides a comprehensive overview of moral philosophy, ethical decision-making models, and marketing ethics theories, encouraging marketers to adopt a more responsible and sustainable approach to their work.
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1st to answer gets Brainliest
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Which of the following can help consumers with excessive debt negotiate with lenders to reduce interest rates and fees
A.Bankruptcy lawyer
B.Credit counseling service
C.Federal trade commission
D.Financial protection bureau
Answers
Answer:
B.Credit counseling service
Explanation:
Credit counseling services involves engaging a credit counselor to pay off unsecured debts through a debt management plan. Credit counselors offer various services, including providing basic money management advice and setting up debt repayment plans.
Credit counseling simplifies the repayment process. Debt payment becomes easy and manageable. Credit counselors may negotiate lower interest rates and reduced monthly payments with creditors, which saves money.
Which statement is the best example of the inelasticity of supply?
A. a wheat farmer must harvest his own crop when it is ripe
B. a pizza parlor makes twice as many pizzas on Saturdays than on Wednesdays
C. a grocery store expands its produce section
D. a barber shop changes it’s hours of operation
Answers
Answer:
I think the letter B.????????
Explanation:
pa brainliest nalang po kung tama
Answer:
Explanation:
The Answer is A: a wheat farmer must harvest his own crop when it is ripe
when ordering raw materials of steel and aluminium the business is considering changing to jit advise them if its a good idea or not
Answers
The advantages the business gets if they change to JIT are
reduction in inventory costImprovement in qualityIncrease in efficiencyThe Advantages:Decisions on whether or not to implement a Just-In-Time (JIT) inventory system for steel and aluminum raw material depend on many variables such as business size, market demand, lead time and supplier reliability. Here are the potential advantages and disadvantages of JIT inventory in such situations:
JIT helps businesses reduce inventory holding costs as raw materials are only ordered as required, thus freeing up cash flow for other investments and creating greater cashflow opportunities.
Quality Improvement: Just-In-Time production methods provide greater quality assurance as materials can be purchased in smaller batches that can then be thoroughly inspected upon their arrival.
Increased Efficiency: Just-In-Time ordering helps shorten lead times as raw materials are ordered only when necessary for production; leading to greater productivity gains overall.
Disadvantages of Just in Time production (JIT):
JIT requires businesses to become increasingly dependent on suppliers for materials delivery on time or at required quality levels; any supplier failure could create major disruption in operations and create costly supply issues for business operations.
Transportation Costs Increase with JIT Delivery Frequencies: JIT deliveries often necessitate more frequent delivery trips, which increases transportation expenses.
Difficulties Responding to Unexpected Changes: JIT requires accurate forecasts for demand and lead times
Requiring an efficient supply chain: JIT requires close cooperation between businesses and suppliers in the supply chain.
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carmen de la cruz has her age listed on her driver's license as being three years younger than it actually is. this is also how old she tells her insurance company she is. her insurance company has discovered she lied about her age. what provision of her life insurance contract states that her benefits will be what her premium would have bought if she had been truthful about her age?
Answers
Misstatement of Age is the provision of life insurance contract that states the premium would have bought if she had been truthful about her age.
What is life insurance?Life insurance is a contract between a policy holder and an insurer wherein the insurer agrees to pay a sum of money in exchange for a premium upon the demise of an insured person or after a predetermined amount of time.
The term "Misstatement of Age Provision" refers to a clause in a life insurance policy that reduces the amount of insurance in cases where the insured's age was given incorrectly on the application to the amount that the premium would have bought at the correct age based on the insurer's rates at the time the policy was issued.
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