Answer: Option (B) is correct.
Explanation:
The three limitations to balance sheets are as follow:
1.) Assets are being noted or stored at a historical cost,
2.) There is a thorough use of the estimates,
3.) There's also omission of several precious non-monetary assets.
Therefore from the given options, we can state that the key limitation of using a balance sheets under the constraints of financial analysis is that different items in a balance sheet are or may be evaluated differently.
This is a profit, which increases next year's budget.
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Answer:
- Stock is overpriced/ overvalued.
- Sell if you own it.
- Don't buy if you don't.
Explanation:
Use CAPM to find the required return on the stock:
Required return = Risk free rate + beta * ( Market return - risk free rate)
= 2.5% + 1.3 * (7% - 2.5%)
= 8.35%
Price based on Constant Dividend Growth Model (CDGM):
Price = Next dividend / (Required return - growth rate)
Next dividend = 1.40 * ( 1 + 4%)
= $1.456
Price = 1.456 / (8.35% - 4%)
= $33.47
<em>Stock is selling for $35. It is overvalued. Don't buy the stock. Sell if you have the stock. </em>
Answer: b. The leaders should find ways to enable the employees to see the value in changes that are needed for the organization to succeed
Explanation:
With regards to the information given in the question, the best option will be for the leaders to find ways to enable the employees to see the value in changes that are needed for the organization to succeed.
In every organization, communication is key between the management and the employees. In this case, the leaders should inform the employees about the reason that they are taking the decision and how the decision will have an impact on the organization.
Taking legal steps against the employees or laying them off isn't the right thing to do. The employees should be made to see the value in the changes to be made.
Therefore, the correct option is B.
