1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Ber [7]
3 years ago
14

The proper discount rate when using the dividend discount valuation model is the:

Business
1 answer:
Anton [14]3 years ago
7 0

Answer:

B) Cost of equity capital

Explanation:

Dividend discount model is used to find the Price of a given stock by calculating the present value of expected future dividends.

The dividend discount formula for finding price(assuming zero growth rate);

P0 = D1/r

The rate; r is the discount rate which is the cost of equity since dividends are paid on equity capital.

Weighted average cost of capital (WACC) is used to discount free cashflows of potential projects.

You might be interested in
Under The Factoring Arrangement, The Factor  <br><br>​
svetlana [45]

Answer:

Hope this may help you

4 0
3 years ago
Every year, General Mills issues a report discussing how the firm has performed against its own standards of conscious marketing
goblinko [34]

Answer:

The correct answer is letter "D": control.

Explanation:

The control phase of the marketing planning process involves comparing the activities that the advertising team has developed with the expected set of actions established. This phase is important to identify if the firm as a whole is meeting the desired performance or if there are adjustments necessary to be made.

7 0
3 years ago
Graphical Designs is offering 10-10 preferred stock. The stock will pay an annual dividend of $10 with the first dividend paymen
tresset_1 [31]

Answer:

PV of the stock today = $115.83

Explanation:

We will use the discounted cash flows approach to calculate the price of the stock today. This approach values the stock by accumulating the present value of all the expected future cash flows from the stock/asset.

As the preferred stock pays a constant dividend after equal intervals of time and for an indefinite period, it can also be treated as a perpetuity. Thus, the formula for the present value of perpetuity will be used to calculate the price of the stock at year 10 that we will discount back to today.

Present value of perpetuity = Cash flow  / expected rate of return

PV of stock at Year 10 = 10 / 0.052

PV of stock at Year 10 = 192.3076923

The value of the today will be,

PV of the stock today = 192.3076923 / (1+0.052)^10

PV of the stock today = $115.83

6 0
3 years ago
Why do firms assess their sourcing capabilities?a. They can easily spot suppliers who are not practicing sustainable sourcing pr
Alexus [3.1K]

Answer:

The answer is c. They can gauge their success in improving their own value-enhancing contributions to the firm

8 0
3 years ago
Loggers are much_______- likely to supply wood to the market if property rights are not enforced.In the presence Of market failu
rosijanka [135]

Answer:

less;

A person smoking in a restaurant emits second-hand smoke that harms other restaurant patrons. <em>b. Externality</em>

A single grocery store is the only source of food in a small town, giving the store the ability to influence the price of food.  <em>a. Market power</em>

Explanation:

Property rights are usually imposed on individuals who are able to control the resources which are of public value. When the society gets affected by the practices of those individuals or entities, property rights made by a government or regulatory body come into the picture. Therefore, those individuals need to be regulated and incentivized by property rights, or they will be less likely to conform to the market needs.

These rights protect the market from <em>market failures</em>, which is their main purpose.  

The most common types of market failures include <em>externalities </em>and <em>market power</em>. The first example is an externality as the unwanted smoke represents the cost (or benefit) which cannot be influenced by a specific party.

The other example is typical market power, as the monopolist (grocery store) can control the price of goods, which is an essential market determinant.

4 0
3 years ago
Other questions:
  • Christina is evaluating Maximum Brands as an investment opportunity. She is very concerned about future financial performance by
    15·1 answer
  • 10. Uneven cash flows A series of cash flows may not always necessarily be an annuity. Cash flows can also be uneven and variabl
    14·1 answer
  • Which stage involves assigning meaning to events? Organization Selection Interpretation-Evaluation
    8·1 answer
  • Which of the following are main responsibilites employers have under OSHA's standards?
    7·1 answer
  • The year-end 2009 balance sheet for Tom's Copy, Inc. lists common stock ($1.00 par value) of $ 5,870 , capital surplus of $ 17,2
    15·1 answer
  • the law of increasing oppurtunity cost is the economic principle that greater production of one good requires giving up more of
    15·1 answer
  • Sanders Inc. is a small brick manufacturer that uses the direct write-off method to account for uncollectible accounts. At the e
    13·1 answer
  • Scott, a young professional, buys a new BMW, even though a Mercedes would have cost him less. Scott values the BMW brand. This i
    10·1 answer
  • Without a_________to govern resources, scarcity becomes a major problem for people who live in brutal, collectivist societies.
    12·1 answer
  • What is the routine business of fmcg
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!