All categories

4 years ago

What is meant by centralised direction?

1 answer:

4 0

Centralized direction explain why we often overestimate how well we can predict future actions of others. <span>The fallacy of </span>centralized direction<span> suggests that when we evaluate actions of others, we often see a </span>centralized direction<span> where it doesn't exist. Hope this answers the question.</span>

You might be interested in

If people expect future earnings of Galt Corporation to be high relative to current earnings, then a. the P/E ratio of its stock

Inessa05 [86]

When earnings are expected to be high relative to current earnings, then a. the P/E ratio of its stock will be high. A P/E ratio of 8 is relatively low.

<h3>What happens when future earnings are expected to be high?</h3>

If earnings are expected to be high as in the case of the Galt Corporation, then the price of the stock will rise.

This will then lead to a high P/E ratio because the price will rise but the earnings will remain the same.

Find out more on the P/E ratio at brainly.com/question/14644755.

#SPJ1

7 0

2 years ago

Good Investments Company forecasts a $2.44 dividend for 2017, $2.62 dividend for 2018 and a $2.77 dividend for 2019 for Mountain

Ivan

Answer:

c.$29.37

Explanation:

First and foremost, it should be borne in mind that the intrinsic value of Mountain Vacations Corporation is the present value of its future dividends for the forecast period(2017-2019) plus the present value of dividend terminal value beyond the forecast period as shown thus:

Year 1 (2017) dividend $2.44

Year 2 (2018) dividend $2.62

Year 3 (2019) dividend $2.77

the terminal value of dividend=expected dividend per year after 2019/ cost of equity capital

expected dividend per year after 2019= $2.94

cost of equity capital =7%

terminal value=$2.94 /7%=$42.00

PV of future dividend=dividend/(1+cost of equity capital)^n

n is the year in which the future dividend is expected, it is 1 for 2017, 2 for 2018 , 3 for 2019 dividend and the terminal value(since the terminal value is already stated in 2019 terms)

intrinsic value of share=$2.44/(1+7%)^1+$2.62/(1+7%)^2+$2.77/(1+7%)^3+$42.00/(1+7%)^3

the intrinsic value of share=$41.11

It is obvious that the options are not correct

The question's inputs are wrong

2017 dividend should have been $1.74

2018 dividend should have been $1.87

2019 dividend should have been $1.98

dividend beyond 2019 should have been $2.10

terminal value=$2.10/7%=$30.00

intrinsic value of share=$1.74/(1+7%)^1+$1.87/(1+7%)^2+$1.98/(1+7%)^3+$30.00/(1+7%)^3

intrinsic value of share=$29.36(closest to c.$29.37)

6 0

3 years ago

The total manufacturing cost variance consists of a.direct materials cost variance, direct labor rate variance, and factory over

Lostsunrise [7]

Answer: The total manufacturing cost variance is made up of direct material cost variance, direct labor cost variance and factory overhead cost variance. (Option C).

Explanation:

Some of the goals of manufacturing companies are to increase company’s revenue and profit. To achieve this, a company needs to know how to manage its costs and these may cause variances in manufacturing.

The total manufacturing cost variance is made up of direct material cost variance, direct labor cost variance and factory overhead cost variance. These costs are the differences between the actual cost incurred and the set cost. These variances help managers to know if the company is meeting up to the required standard.

7 0

3 years ago

County governments in Texas:a.are single-purpose governments.b.all operate under the general laws of the state of Texas for the

Svet_ta [14]

Answer: All operate under the general laws of the state of Texas for the operation of county government.

Explanation: County officials are also members of the community, in where they are obliged to pay all necessary taxes as do and also drive on public roads as you do too.

6 0

3 years ago

Consider 2 scenarios: Boom Economy and Normal Economy. The Boom economy has 30% chance of happening, while Normal economy has 70

natali 33 [55]

Answer:

A) Expected Return of Stock ABC = Probability of Boom * Return of ABC in boom+Probability of Normal * Return of ABC in norma

ER = 30% * 25% + 70% * 4% = 10.30%

Expected Return of Stock XYZ = Probability of Boom * Return of XYZ in boom+Probability of Normal*Return of XYZ in norma

ER = 30% * 10% + 70% * 6.5% = 7.55%

Variance of Stock ABC = 30% * (25%-10.30%)^2 + 70% * (4%-10.30%)^2 = 0.9261%

Variance of Stock XYZ = 30% * (10%-7.55%)^2 + 70% * (6.5%-7.55%)^2 = 0.02573%

Standard Deviation of ABC =0.9261%^0.5 = 9.62%

Standard Deviation of XYZ =0.02573%^0.5 = 1.60%

B) Coefficient of Variation of ABC=Standard Deviation of ABC/Expected Return of ABC =9.62%/10.30%=0.93

Coefficient of Variation of XYZ=Standard Deviation of XYZ/Expected Return of XYZ =1.60%/7.55%=0.21

Stock with less Coefficient of variation to be chosen as lower Coefficient of variation show lower risk in relation to the return.

Hence stock XYZ is best for investment.

C) Expected Return of Market =30% *12% + 70% * 5% = 7.1%

Variance of Market =30% * (12% - 7.1%)^2 + 70% * (5%-7.1%)^2 = 0.1029%

Covariance of Stock ABC and Market = 30% * (12% - 7.1%) * (25% - 10.30%) + 70%*(5% - 7.1%) * (4% - 10.30% )= 0.0030870

Beta of ABC = Covariance of Stock ABC and Market / Variance of Market

Beta ABC = (0.0030870 / 0.1029%) = 3.00

Covariance of Stock XYZ and Market =30% * ( 12% - 7.1%) * (10% - 7.55%) + 70% * (5% - 7.1%) * (6.50% - 7.55%) = 0.000515

Beta of Stock XYZ = Covariance of Stock XYZ and Market /

Variance of MarkeT

Beta XYZ = (0.000515 / 0.1029%) = 0.5

8 0

4 years ago