All categories

3 years ago

Which of the following statements is true about the constant growth model?

1 answer:

7 0

Answer: The constant growth model can be used if a stock's expected constant growth rate is less than its required return.

Explanation:

The Constant Growth Model is a stock valuation method.

It assumes that a company's dividends are increasing at a constant growth rate indefinitely.

Formula: Current price = (Next dividend the company is to pay) ÷ (required rate of return for the company - expected growth rate in the dividend.

When expected constant < required return, then the constant growth model can be used.

Hence, the statement is true about the constant growth model :

The constant growth model can be used if a stock's expected constant growth rate is less than its required return.

You might be interested in

Exercise 13-07 Nordstrom, Inc. operates department stores in numerous states. Suppose selected financial statement data (in mill

spin [16.1K]

Answer:

See below

Explanation:

Data given

Cash and cash equivalents $760 $77

Accounts receivables net $2,080 $1,890

Inventory $830 $810

Other current assets $440 $433

Total current assets $4,110 $3,210

Total current liabilities $2,100 $1,590

Net credit sales $8,258

Cost of goods sold $5,328

1. Current ratio = Current assets/Current liabilities

= 4,110/2,100

= 1.96

2. Accounts receivable turnover = Credit sales/Average accounts receivables

= 8,258÷ [(2,080+1,890)/2]

= 8,258 ÷ 1,985

= 4.16 times

3. Average collection period = Average accounts receivables/Credit sales × 365 days

= (1,985/8,258) × 365

= 87.7 days

4. Inventory turnover = Cost of goods sold/Average inventory

= 5,328/[830 + 810)/2]

= 5,328/820

= 6.5 times

5. Days in inventory = Average inventory/Cost of goods sold × 365

= (820/5,328) × 365

= 56.2 days

3 0

3 years ago

Compare Mr. Leeson's frequent career moves with that of a Japanese employee with a lifetime corporate loyalty. Comment on the ad

ivann1987 [24]

Answer:

The pros and Cons of Mr. Leeson's frequent career and the Japanese employee with a lifetime corporate loyalty can be summarized as follows:

Explanation:

Frequent career moves also known as Job hopping was initially viewed as a negative behavior that doesn't portray loyalty while Lifetime employment in one establishment seemed commendable.

However, in recent times, studies has shown that the premise above is not true. There are pros and cons for each of them.

PROS

Frequent career change promotes acquiring new skills, experiences and competences to handle complex tasks and lifetime corporate loyalty encourages specialization in one field.
Frequent Career Change fosters swift career development and advancement while lifetime corporate loyalty promotes internal advancement opportunities and promotional offers

CONS

Frequent career change does not portray a good image before employers and human resource experts, It can be viewed as poor work ethic while Lifetime corporate loyalty causes complacency and inhibits acquisition of career advancement skills.

5 0

4 years ago

A company reports the following amounts at the end of the year:

Inga [223]

Answer:

33.33%

Explanation:

Given:

Sales revenue = $360,000

Cost of goods sold = $240,000

Net income = $53,000

Now,

the gross profit = Sales revenue - Cost of goods sold

The gross profit = $360,000 - $240,000 = $120,000

Thus,

the company's gross profit ratio = $\frac{\textup{Gross Profit}}{\textup{Sales revenue}}$

The company's gross profit ratio = $\frac{120,000}{\textup{360,000}$

The company's gross profit ratio = 33.33%

8 0

3 years ago

Survey topic with problem

boyakko [2]

Elections

thats a good one

6 0

4 years ago

Read 2 more answers

What is an example of a functional organizational structure?

I am Lyosha [343]

Answer:

The correct answer is option 2. a hospital organized by divisions such as pediatrics, inpatient, outpatient, etc.

Explanation:

An organization that has a functional organizational structure can organize its employees in a better way.

Each of the employees will be dedicated to their specialty and will be located in their corresponding sector. Each sector will be a department, and will have a chief in charge. In turn, each department head will be headed by a general manager.

This is what happens in the hospital, there is a chief in charge of the entire hospital, which in turn is divided into sectors with each specialist. Each sector will have a chief specialist who will be in charge of said department.

Given this information we can say that the correct answer is option 2.

6 0

3 years ago