Answer:
Option (d) $5,549.96
Explanation:
Data provided in the question:
Annual payments = $800
Time, n = 12 years
Discount rate, r = 7% = 0.07
Now,
PV2 = Annual payments × ((1 - (1 + r)⁻ⁿ)) ÷ r ) × (1 + r)
= $800 × ( (1 - ( 1 + 0.07)¹²)) ÷ 0.07) × (1 + 0.07)
PV2 = $6,354.15
Therefore,
Present value today = PV2 ÷ (1 + r )²
= $6,354.15 ÷ (1 + .07)²
or
= $5,549.96
Hence,
Option (d) $5,549.96
Answer:
True
Explanation:
Modigliani and Miller or MM hypothesis states that dividend policy of a firm plays no role in the determination of the market value of it's stock or the market value of the firm.
As per the theory, dividend policy of a firm is irrelevant and does not affect the value of the firm.
The theory maintains that under specific set of assumptions, the capital structure of a firm and it's composition does not play any role in determining the value of a firm and no capital structure can be termed as optimal.
It further states, the value of a firm is determined by capitalizing it's expected return with the firm's average cost of capital. Also, a firm cannot change the total value of it's securities by splitting it's cash flows into different streams such as dividends or retained earnings.
A firm's value is determined by a firm's real assets and not by it's issued securities.
Answer:
A. inelastic
Explanation:
Inelastic demand is when people buy about same amount whether price drops or rises.
Even with the higher changes in the prices in the cinema, there is not considerable impact on Movie going audience. Also, addition to it, people go to cinemas at evening and weekend shows more than daytime shows or weekday shows even the tickets have price higher.
<u>This shows that the inelastic nature of movie ticket demand.</u>
6 times 5 is 30 the answer would be 6%
