Using the Gordon Growth Model (a.k.a. Dividend Discount Model), the intrinsic value of a stock can be calculated, exclusive of current market conditions. In this model, the value of the stock is equated to the present value of the stock's future dividends.
<span>Value of stock (P0) = D1 / (k - g)
</span>where
D1<span> = </span><span>expected annual </span>dividend<span> per share in the following year </span>
<span>k = the investor's discount rate or required </span>rate of return
g = the expected dividend growth rate
<u>From the problem:</u>
The value of stock is $10.80
D1 is $0.40
g is 0.08
k is unknown
Solution:
Rearranging the equation for Gordon Growth Model to solve for k:
k = (D1/P0) + g
Substituting the variables with the given values,
k = (0.40/10.80) + 0.08
k = 0.1170
In percent form, this is
0.1170 * 100% = 11.70%.
Thus, the total rate of return on the stock is 11.70%.
<u>Answer: </u>Tell and Listen method of appraisal is used in the above mentioned scenario.
<u>Explanation:</u>
In tell and listen method of appraisal the evaluation of the employees is communicated to them at first. The superior in hierarchy does the appraisal where the superior gives the feedback on the performance at first which includes the strengths and weakness.
Then the employee is allowed to respond to the evaluation. The employee can express his feelings after receiving the evaluation whether he is happy or not. The employees have right to vent their feelings even its frustration.
Answer:
options (b),(c) and (e).
Explanation:
Okay let us take the options one after the other;
(a). People in Oregon send money to help cyclone victims in Bangladesh: this is WRONG because the question asked us to identify an INCOME-BASED payment and it is not.
(b). A resident of Maryland buys a car produced by Toyota in Japan: this is CORRECT. The person making the payment is a US resident making payment to a Japanese firm.
(c). Apple corporation pays a stock dividend to a resident of India: This is also CORRECT because Apple is a US based company making payment to Indian(a foreigner).
(d). A foreign exchange student from Paris comma France comma sends wine and cheese to her host family in Columbus comma Ohio : this WRONG because the student is also a foreigner.
(e). Orange Telecom comma a French company comma pays a stock dividend to a resident of Kansas City: this is CORRECT. Orange Telecom is a France company paying income to a foreigner (a U.S resident).
Answer:
$475,500
Explanation:
Sales is $1,000The discountscount is $2500
Sales return and allowances are $15,000
The cost of goods sold is $525,000
Therefore the gross profit can be calculated as follows
= 1,000,000-2,500-15,000-525,000
= 457,500
Hence the gross profit is $475,500
Answer:
the first option is the correct one
