Use the Following Information to Answer the Question(s)below

question 52

Multiple Choice

Use the following information to answer the question(s) below.
Dagny Taggart has just purchased a home and taken out a $400,000 mortgage.The mortgage has a 30-year term with monthly payments and has an APR of 5.4%.
-The total amount of interest that Dagny will pay during the first month of her mortgage is closest to:

• A)$1110.
• B)$1785.
• C)$1800.
• D)$2245.

Calculate and interpret return on equity (ROE).

Determine the dividend yield ratio.

Calculate and interpret net profit margin percentage.

Interpret the price-earnings ratio.

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Definitions:

Regressive Tax

A tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases, disproportionately affecting low-income earners.

General Sales Taxes

A tax imposed on sales transactions, usually calculated as a percentage of the sales price and collected by the seller at the point of purchase.

Personal Income Taxes

Taxes levied on the income of individuals, typically graduated so that higher income levels are taxed at higher rates.

Progressive

Describes a tax system where the tax rate increases as the taxable base amount increases, typically aimed at reducing income inequality.