Answer:
The stock price is $31.14
Explanation:
The value of Brickhouse stock today is the present values of future cash flows from the stock discounted using the required rate of return of 10.7% as the discount rate as done below:
Years cash flows discount factor Present values
1 $2.85 1/(1+10.7%)^1=0.903342367 $2.57
2 $2.34 1/(1+10.7%)^2=0.816027432 $1.91
3 & beyond *$32.67 1/(1+10.7%)^2=0.816027432 $ 26.66
total present values= $31.14
* the year 3 and beyond represents the terminal value of the stock,which is computed using the formula below
=D2*(1+g)/r-g
D2 is the year dividend of $2.34
g is the dividend growth rate of 3.3%
r is the required rate of return which 10.7%
terminal value=$2.34*(1+3.3%)/(10.7%-3.3%)
=2.41722
/0.074
=$32.67
Answer:
The correct answer is C) Extrinsic reward
Explanation:
Extrinsic reward is reward that an employer gives to an employee in compensation for the achievement of something. In this case, what is achieved is very vague ("good work") but in a real firm, it could be something more specific. For example, a sales manager could reward his top selling employees with a monthly salary bonus.
The standard deviation of sample equals: 11
Explanation:
Given:
variance of sample (
) = 121
no, of observations made = 441
standard deviation = ?
By using the formula:
Standard deviation (S) = 
= 
= 
= 11
Hence the standard deviation is equal to 11.
Answer:
Part A. $1200
Part B. $1200
Explanation:
Part A.
Under MACRS rules, the depreciation rate for the 5 year recovery period asset would be:
Year 1 20%
Year 2 32%
Year 3 19.2%
Year 4 11.52%
Year 5 11.52%
Year 6 5.76%
This means that the first year MACRS depreciation deduction would be 20% which is $1200 ($6000 * 20%).
Part B.
If Sid does not elect Section 179 expensing then the depreciation would be calculated using straight line basis.
The depreciation would be:
Depreciaiton Expense = $6000 / 5 Years life = $1200
