Answer:
A) NPV= - $428,888.89 B) Company would break Even if g = 5.68%
Explanation:
Hi, we have to bring to present value all the inflows and outflows of cash, this is the formula to use and the math of it.


The question says that "at what constant growth rate would the company just break even..." and well, a NPV=0 is not precisely break even, actually, it means that the company is obtaining exactly what is asking for any investment, but let´s assume that the question was, what should the growth rate be for the company to accept this project?. So we have to solve the first equation for "g", that is:

So the constant growth rate has to be at least 5.68% for the company to accept this project (NPV=0)
Best of luck
Answer:
is this a book if so send me a link
Explanation:
Answer:
A vocation is an occupation to which a person is specially drawn or for which they are suited, trained, or qualified. And since it is capital vocation I guess you just tie that definition into your capital and how that would work for your capital. I hope this helps. It was kind of difficult to find the answer. :) I wish you the best of luck! If you need any more help just ask!
Answer:
you should pay up to $2,737.84 to Tobi
Explanation:
first, the terminal price of the perpetuity must be determined = annual payment / r = $1,500 / .08 = $18,750
now, the present day value of the future terminal value
present value = future value / (1 + r)ⁿ = $18,750 / (1 + 8%)²⁵ = $2,737.84
Answer:
Current Price of the Share Stock is $ 37.86 (D)
Explanation:
Using dividend valuation method with a constant growth rate assumption, share price is calculated as : Po =D1/(Ke-g).
Where; Po ⇒Market Value excluding any dividend currently payable
D1= Do(1+g)⇒Expected dividend in one year's time
Ke =Required rate of return by shareholders
g= Dividend growth rate
<u>Calculation</u>
D1 = 5(1+0.06)= $5.3
Hence, Po= 5.3/(0.20-0.06)
Po=$37.86
The share price is expected to reflect the future expected stream of income i.e dividends and capital gains ,discounted at an appropriate cost of capital.
Some of the assumptions of dividend valuation method include but not limited to the following:
- it assumed that investors act rationality and in the same way ;
-the dividend either show growth or no growth;
-the discount rate used exceeds the dividend growth rate.