Answer:
1. Operating plan.
2. Operating plan.
3. Financial plan.
4. Dividend policy.
5. B and C.
Explanation:
1. Operating plan: provides detailed implementation guidance for a firm's operations, as well as a forecast of the company's expected future free cash flows.
2. Operating plan: provides the inputs necessary for a risk management evaluation using sensitivity analysis, scenario analysis, or simulations.
3. Financial plan: Is based on knowledge of the amount of funds necessary to compensate the firm's shareholders, and the mix of debt and equity capital used to finance the firm.
4. Dividend policy: sets forth specific targets for cash or share distributions to the firm's shareholders.
Capital structure: describes specific targets for the mix of debt and equity used to finance a firm.
Financial planning can be defined as the process of estimating the amount of capital required for the smooth operations of the business and determine how to achieve the firm's set goals and objectives.
Hence, the following statements are true about financial planning;
I. Once a firm's forecasted financial statements are prepared, the firm must determine how much capital it will need to support these plans.
II. Management must monitor operations after implementing a financial plan to detect deviations from the plan and adjust accordingly.
Answer:
The Treynor index for the stock will be 0.02.
Explanation:
The average return of the stock is 10%.
The average risk-free rate is 7%.
The standard deviation of the stock's return is 4%.
Stock's beta is given at 1.5.
Treynor index
= (Portfolio return- risk free return)/beta of the portfolio
=(0.10-0.07)/1.5
=0.03/1.5
=0.02
So, the Treynor index for the stock will be 0.02.
FACTORS AFFECTING COMMUNICATION
Status / Role.
Cultural differences .
Choice of communication channel .
Length of communication .
Use of language .
Individual Perceptions / Attitudes / Personal
Answer:
Option 4
Explanation:
In this question ,we have to compute the WACC which is shown below:
= Weightage of debt × cost of debt × ( 1- tax rate) + (Weightage of common stock) × (cost of common stock)
For Option 1, it would be
= (0.3 × 10%) × ( 1 - 40%) + (0.7 × 12.5%)
= 1.8% + 8.75%
= 10.55%
For Option 2, it would be
= (0.4 × 10.5%) × ( 1 - 40%) + (0.6 × 13%)
= 2.52% + 7.8%
= 10.32%
For Option 3, it would be
= (0.5 × 11%) × ( 1 - 40%) + (0.5 × 13.5%)
= 3.3% + 6.75%
= 10.05%
For Option 4, it would be
= (0.6 × 11.7%) × ( 1 - 40%) + (0.4 × 14.2%)
= 4.212% + 5.68%
= 9.89%
For Option 5, it would be
= (0.7 × 13%) × ( 1 - 40%) + (0.3 × 15.5%)
= 5.46% + 4.65%
= 10.11%
So based on this, the management should accept option 4 as it derives the best debt asset ratio
The weightage of equity would be come
= 1 - weightage of debt
