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Law Incorporation [45]
3 years ago
6

Suppose the growth rate of the firm's profit is 7 percent, the interest rate is 10 percent, and the current profits of the firm

are $120 million. What is the value of the firm
Business
1 answer:
uysha [10]3 years ago
5 0

Answer:

$4,400,000,000

Explanation:

The formula is shown below together with the computation.

Value of the firm = [(Firm's current profit ) × (1 + firm's opportunity cost of funds/Interest rate)] ÷ (Firm's opportunity cost of funds/Interest rate - Constant growth annual rate)

= [($120,000,000) × (1 + 10%)] ÷ (10% - 7%)

= [($120,000,000) × (1.1)] ÷ (0.1 - 0.07)

= $120,000,000 × 1.1 ÷ 0.03

= $132,000,000 ÷ 0.03

= $4,400,000,000

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3 years ago
An investor pays $900 for a bond with a principal value of $1,000 and a coupon rate of 8%. How much in annual interest will the
solmaris [256]

Answer:

Annual Interest = $80

Interest rate = 8.89%

Explanation:

The investor pays discounted price for this bond.

We know, Annual Interest = Coupon payment/Market value

Given,

Coupon payment = Principal value*Coupon rate

Coupon payment = $1,000*8% = $80

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Therefore, the annual interest rate = $80/$900

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3 years ago
Which is the best measure of risk for a single asset held in isolation (Stand Alone Investment), and which is the best measure f
borishaifa [10]

Answer:

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As for portfolio assets that are well diversified, the best measure would be beta because diversified portfolios deal with systematic risk and beta shows the movement of the portfolio in relation to the market and so will show that systematic risk.

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3 years ago
A great way to make an impression after an interview is to send a handwritten thank-you note to your interviewer within ________
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The best way to make an impression on your interviewer is to send a handwritten thank-you note within 48 hours after your interview.

<h3>What is an Interview?</h3>

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Interviews are used most times to know the qualification of an individual and to get to know more about the individual. To make an impression on the interviewer, it is advisable to send a thank you note to the interviewer within 48 hours after the interview.

Learn more about Interviews here:

brainly.com/question/8846894

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True/ false any procedure that is used to make employee selection decisions is construed to be a test.
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