A traditional economy is when goods are sold and bought based on how things have been done for generations.

Todd Mountain Development Corporation is expected to pay a dividend of $3 in the upcoming year. Dividends are expected to grow a

PilotLPTM [1.2K]

Answer:

the intrinsic value of the stock is $60

Explanation:

The computation of the intrinsic value of the stock is as follows:

But before that the cost of equity is

The Cost of Equity is

= Risk Free Rate + Beta × (Market Return - Risk Free Rate)

= 8% + 0.80 × (18% - 8%)

= 16%

Now

Intrinsic Value is

= Next year Dividend ÷ (Rate of Return - Growth rate)

= $3 ÷ (16% - 11%)

= $60

hence, the intrinsic value of the stock is $60

7 0

2 years ago

The impairment rule for goodwill involves how many steps?(a)1(b)2(c)3(d)4

Kobotan [32]

Answer: 2 steps

Explanation: While calculating impairment of goodwill following steps should be taken :-

1.In the first step the fair value of the goodwill is compared with its carrying value.

2. In the second step, if the fair value comes to be lower than the carrying value, then it is concluded that there is an impairment and then it is computed accordingly.

7 0

3 years ago

You have borrowed $28,000 at an interest rate of 12% compounded annually. Equal payments will be made over a four-year period, w

Sloan [31]

Answer:

$A = 28000 [\frac{0.12 (1.12)^4}{(1.12)^4 -1}]$

$A = 28000 [\frac{0.12*1.574}{1.574-1}]$

$A=28000*0.3292 = 9218.564$

So then the annual pay would be $ 9218.564 for this case

Explanation:

For this question we can use the Equivalent annual value (A) given by the following expression:

$A = PV [\frac{i (1+i)^t}{(1+i)^t -1}]$

Where $PV = 28000$ represent the pesent value

$i = 0.12$ since the rate is yearly

$t = 4$ since we have 4 years to pay

So then we have everything to replace and we got:

$A = 28000 [\frac{0.12 (1.12)^4}{(1.12)^4 -1}]$

$A = 28000 [\frac{0.12*1.574}{1.574-1}]$

$A=28000*0.3292 = 9218.564$

So then the annual pay would be $ 9218.564 for this case

And this amount would be paid each year in order to pay all the money after 4 years.

6 0

3 years ago

Allison will graduate from high school next June. She has ranked her three possible post-graduation plans in the following order

Dmitrij [34]

Answer:

tutoring opportunity cost: 20,000 consulting job

consulting job opportunity cost: 5,000 + travel from tutoring

collegue: 20,000 consulting job

Explanation:

opportunity cost: cost of the best rejected project, proposal or income

income from work as a consulting job: 20,000

income from tutoring: 5,000 ( externality of travel around the world)

collegue cost of 5,000

The tutorng has an externality of travel around the world. We can measure how much Allison values that chances but it is something she will consider when picking her plan.

6 0

3 years ago

Ace Electric's income statement reports Sales of $100,000; Cost of goods sold of $46,000, Operating expenses of $34,000, Interes

sukhopar [10]

Answer:

Total Sales

Explanation:

Vertical analysis is a financial statement analysis in which all the line items of any financial statements (income statement or balance sheet) are enlisted as a percentage of one main item. For income statement, the main item is total sales as the item starts with the total sales while for balance sheet, the main item is total assets as the summation of current and non-current assets conclude the total asset. Therefore, we need to give 100% for total sales if we analyse the ratio vertically.

3 0

3 years ago