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Keith_Richards [23]
2 years ago
11

Estimates of a stock's intrinsic value calculated with the free cash flow methodology depend most critically on _______.

Business
1 answer:
lubasha [3.4K]2 years ago
4 0

Estimates of a stock's intrinsic value calculated with the free cash flow methodology depend most critically on the terminal value used.

What is intrinsic value of stock?

A thing, asset, or financial contract can have intrinsic value if it has some basic, objective value. It may be a good buy or a good sale if the market price is less than that value. There are various approaches for determining a reasonable appraisal of a share's intrinsic value when reviewing equities.

What does terminal value mean?

The worth of a firm, project, or asset after the period for which future cash flows can be predicted is known as its terminal value (TV). After the projected period, terminal value assumes a company will continue to expand at a specific pace indefinitely.

Learn more about intrinsic value: brainly.com/question/14582100

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Sarah is a 50 percent partner in the SF Partnership and has an outside basis of $56,000 at the end of the year prior to any dist
Vikentia [17]

Answer:

A. $0 gain, $36,000 basis

Explanation:

In the distribution, from the information given, Sarah does not recognize any gain or loss.

However, given that

She had $56000 basis at end of year prior to distribution.

Then receives $20000 from distribution after reallocating her basis in SF to cash in amount equal to distribution

Therefore,

Her basis left = 56000 - 20000

= $36000

3 0
3 years ago
Read 2 more answers
The following is a condensed version of the comparative balance sheets for Pearl Corporation for the last two years at December
Maksim231197 [3]

Answer:

Balance Sheets    

2020          2019                Deviation  

$292,050 $128,700  $163,350        Cash

$163,350   Cash Flow Ind Method  

$264,000   Net Income  

$28,050   Depreciation  

-$49,500   Dividends  

$36,300   Investments  

$8,250           Accounts Receivable  

-$28,050   Current Liabilities  

-$95,700   Property and Equipment  

Explanation:

To prepare the statement of cashflow it's necessary to calculate the difference between the balance on each year.

First we need the value of the Net Income and Depreciation of the year as initial value of the cash flow ($264,000+$28,050),  

then we deduct the amount of dividends paid during the year (-$49,500).  

Then we begin to calculate the Assets section, everytime that the Assets are higher than the past year we have to put money  

from the cash flow to compensate the assets increase and vice versa, with exception of the Cash Accounts that we are calculating.

Per Example: Accounts Receivable +$8,250 and Investments +$36,300.

Property decreased Cash flow which means that we buy some assets (-$97,500 )

Then with the Liabilities we do the same but in this case an increase in the liabilities means we have more money to our cash flow,

per example, an increase in the accounts payable means that we paid less to our suppliers so we have the money in the cash accounts.  

Total Current Liabilities decrease $28,050 , we paid more liabilities than the past year, so we have to use cash.  

To complete the cash flow statement  it's necessary that the amount of the statement be equal to the deviation in the cash account between the past year and the current one  

6 0
3 years ago
the common stock of salazar insurance pays a constant annual dividend of $4.80 per share. what is one share of this stock worth
kotegsom [21]

Market Price =$36.09,is one share of this stock worth at a discount rate of 13.3 percent.

<h3>Common stock: What does that mean?</h3>

A security that symbolizes ownership in a firm is called common stock. Common stock owners choose the executive board and cast ballots for corporate rules. This kind of stock ownership frequently offers better long-term rates of return. Common stock is not subject to either assets or liabilities.

<h3>How are shares & common stock different from one another?</h3>

Definition: The term "stock" refers to the holder's interest in one or more businesses. A single share of interest in a firm is referred to as a "share" in contrast. For instance, if X has stock investments, X may have a collection of shares from various companies.

<h3>Briefing:</h3>

Market price = dividends per share

P0 = $4.80/.133

P0 = $36.09

Market Price =$36.09

To know more about common stock visit:

brainly.com/question/13762106

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5 0
1 year ago
Assume the small-country model is applicable. If the world price of the product is $6 and an import quota of 400 units is impose
algol13

Answer:

Equilibrium price = $6

Total quantity in the market would be > 400 units ( unchanged )

Explanation:

Applying small=country model

world price of product = $6

import quota = 400 units

The Equilibrium price in Marketopia would be $6 and the total quantity available in Marketopia would > 400 units

This is because in a small country assumption model, the total imports made by any country is insignificant to the Total quantity of the products available in the market therefore it has no effect on the price of the products even if when the imports are stopped by the country  

6 0
3 years ago
"when the economist says that material wants are insatiable, he means that:"
Ede4ka [16]
<span>When the economist says that material wants are insatiable, he means that these wants are virtually unlimited and therefore incapable of complete satisfaction. Insatiable means that they are impossibly to satisfy. In the economic world it is best to make use of the limited resources to help satisfy virtually unlimited wants. </span>
4 0
3 years ago
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