How much ever percent she cuts so will the value of her sales
Answer:
Option (A) is correct
Explanation:
Given that,
Free cash flow in Year 3, FCF3 = $40 million
FCF to grow at a constant rate, g = 5%
Weighted average cost of capital, WACC = 10%
Cost of equity = 15%
Therefore,
Horizon Value at year, t = 3:




= $ 840
Answer: C. 17.5%
Explanation:
The Return on Equity can be calculated by the formula;
ROE = Growth rate / (1 - dividend payout ratio)
25% = Growth rate / ( 1 - 30%)
Growth rate = 25% * 70%
Growth rate = 17.5%
Use the formula of the present value of an annuity ordinary to find the monthly payment
The formula is
Pv=pmt [(1-(1+r/k)^(-kn))÷(r/k)]
Pv present value 14000
PMT monthly payment?
R interest rate 0.07
K compounded monthly 12
N time 4years
Solve the formula for PMT
PMT=pv÷[(1-(1+r/k)^(-kn))÷(r/k)]
PMT=14,000÷((1−(1+0.07÷12)^(
−12×4))÷(0.07÷12))
=335.25
Total payments
335.25×12 months×4years
=16,092
Total amountof interest
16,092−14,000
=2,092
Hope it helps!
Answer:
Retained earning
Explanation:
A company's profits are distributed to shareholders as dividends, retained in the business for reinvestment, or both. Therefore, retained earning are profits that were not distributed to shareholders. They are funds that belong to owners but withheld for use in the business.
Retained earnings form part of a company's capital. It is money that shareholders have contributed to the business by not sharing in profits.