All business strategies seek to gain competitive advantage. a. True b. False
1 answer:
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Answer:
d. $1050.
Explanation:
We multiply each account balance by the expected uncollectible amount and then addd them to get the expected total for doutful accounts
Balance of the allowance account: 100
The expense will be the adjustment made on the allowance to get the expected balance of 1,150
1,150 - 100 = 1,050
we increase the allowance bu 1,050 to get our expected uncollectible fro maccounts receivable agaisnt the bad debt expense ofthe period.
Answer:
Intrinsic value: 53.41 dollars
Explanation:
First, we use the CAPM model to know the value of the stock
risk free 0.085
premium market =(market rate - risk free) = 0.045
beta(non diversifiable risk) 1.3
Ke 0.14350
Now we need to know the present value of the future dividends:
D0 = 2.8
D1 = D0 x (1+g) = 2.8 * 1.23 = 3.444
D2 3.444 x 1.23 = 4.2361200
The next dividends, which are at perpetuity will we solve using the dividned grow model:
In this case dividends will be:
4.23612 x 1.07 = 4.5326484
return will be how return given by CAPM and g = 7%
plug this into the Dividend grow model.
value of the dividends at perpetity: 61.6686857
FInally is important to note this values are calculate in their current year. We must bring them to present day using the present value of a lump sum:
3.011805859
3.239633762
47.16201531
We add them and get the value of the stock:
53.413455