Answer:
A) The new value of a share of Summit Systems stock based on this information is $17.65
B) $17.65. This is due to the fact that If the information about Summit Systems has reached the capital market, the revised growth rate has already been applied.
Explanation:
Given:
Equity cost of capital = 11.0 %
Dividend in one year = $1.50
Dividends growth per year = 6.0 %
A) If expected growth rate is 6.0%:
Value of share = Expected dividend ÷ (Cost of capital - Growth rate)
Value of share = $1.50 ÷ (0.1150 - 0.060)
Value of share = $27.27
If expected growth rate is 3.0%:
New_Value of share = Expected dividend ÷ (Cost of capital - Growth rate)
New_Value of share = $1.50 ÷ (0.1150 - 0.030)
New_Value of share = $17.65
Answer:
The order results in an incremental net income of $69,278 therefore accept
Explanation:
Consider the Incremental Costs and Revenues arising from this decision.
Since Maize has sufficient excess operating capacity, fixed costs are irrelevant for this decision.
Sales (6,400 units ×$31.76) 203,264
Variable Costs (6,400 units ×$19.94) (127,616)
Logo and Shipping Costs (6,400 units ×$1.00) (6,400)
Net Income 69,248
The order results in an incremental net income of $69,278 therefore accept
When a firm invests directly in a business or venture in another country, it is called FDI.
A form of private equity financing known as venture capital (VC) is given by venture capital funds or organizations to startups, early-stage, and developing businesses that have been identified as having a high growth potential or that have already shown a high growth rate (in terms of number of employees, annual revenue, scale of operations, etc). These early-stage businesses are funded by venture capital firms or funds in exchange for equity, or ownership stakes.
In the hopes that some of the businesses they support will succeed, venture capitalists take on the risk of financing hazardous start-ups. Startups face a lot of uncertainty, and VC investments frequently fail.
Learn more about venture here:
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