Answer:
The answer is $41.67
Explanation:
Po = D1/r - g. This formula is called Discount Dividend Model and it is one of the methods used in valuing company's stock.
Po is the present or current value of the stock
D1 is the next year dividend payment
r is the discount rate
g is the growth rate.
Po = $5.00 /0.16 - 0.04
= $5.00/0.12
=$41.67
Therefore, the current stock price is $41.67
Fitzgerald wanted his novel to be mysterious. He need not give out all the information because he wanted the readers to be suspenseful regarding the story. Gatsby doesn't understand how he isn't welcome because he's too naive for thinking he is important.
Answer:
The WACC change if the new tax rate was adopted is - 0.35%
Explanation:
For computing the WACC change, first we have to determine the after tax cost of debt by applying the 40% and 45% tax rate which is shown below:
After tax Cost of debt = Cost of debt × ( 1- tax rate)
For 40% tax rate, it would be
= 7% × ( 1 - 40%)
= 4.2%
For 45% tax rate, it would be
= 7% × ( 1 - 45%)
= 3.85%
The change in WACC would be
= 3.85% - 4.2%
= - 0.35%
Answer:
The correct answer is letter "C": will remain the same.
Explanation:
A partnership is an organization with two or more members running a business. They share the profits in percentage terms in proportion to their partnership value. The partnership dissolves and a new partnership is created when one of the partners is removed, retired or deceased or even when a new partner is introduced. The remaining partners' capital will be the same, for accounting purposes.
Answer:
The numbers are missing, so I looked for similar questions to fill in the blanks:
Rf (Switzerland) = 0.54%
Rm (Switzerland) = 8.5%
Beta (Switzerland) = 0.919
Rm (global) = 9.06%
Beta (global) = 0.532
a. What is Nestlé's cost of equity based on the domestic portfolio for a Swiss investor?
Re (Switzerland) = Rf + [Beta x (Rm - Rf) = 0.54% + [0.919 x (8.5% - 0.54%)] = 0.54% + 7.32% = 7.86%
b. What is Nestlé's cost of equity based on a global portfolio for a Swiss investor?
Re (global) = Rf + [Beta x (Rm - Rf) = 0.54% + [0.532 x (9.06% - 0.54%)] = 0.54% + 4.53% = 5.07%
