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Nostrana [21]
3 years ago
5

Do small changes in the assumptions pertaining to the estimation of the terminal value have a significant impact on the calculat

ion of the total value of the target firm? If so, why?
Business
1 answer:
IgorC [24]3 years ago
8 0

Answer:

Yes, small changes in the assumptions pertaining to the estimation of the terminal value have a significant impact on the calculation of the total value of the target firm.

Explanation:

Terminal value is dependent on the input used in the valuation and the two inputs which heavily influence the value of enterprise are future growth projection and discount rate.

Accurately projecting the future cash flow can be a doubting task and can result in a degree of uncertainty built into estimate.

Small changes in the assumptions pertaining to the estimation of the terminal value have a significant impact on the calculation of the total value of the target firm. This is because, it is these small changes in the stable growth rate can change the terminal value significantly and the effect gets larger as the growth rate approaches the rate used in the estimation of the total value of the target firm.

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Radda [10]

Answer:

(B) Hire the firefighter if the cost of the new firefighter is less than $75,000.

Explanation:

The city should hire the Firefighter only if the cost of new firefighter is less than $75,000.

Since $5 x 15000 residents = $75, 000.

Therefore it is still beneficial to hire a new firefighter if the cost is less than $75, 000

5 0
3 years ago
Fresh Baked Goods has 36,800 shares of stock outstanding at a market price of $24.91 per share. What will be the price per share
Cloud [144]

Answer:

$23.50 per share

Explanation:

The computation of the price per share after considering the stock dividend for the 6% is shown below:

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= (36,800 shares × $24.91) ÷ (36,800 shares × 1.06)

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Hence, the price per share is $23.50 per share

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2 years ago
I am pretty sure brainly is not just used for school work so what are some relationship advise
Blizzard [7]

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always speak the truth

Explanation:

7 0
3 years ago
Cutter Enterprises purchased equipment for $72,000 on January 1, 2018. The equipment is expected to have a five-year life and a
hram777 [196]

Answer:

$28,800

$25920

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3 0
3 years ago
After an oil spill off the California coast, the ladies’ aide society of Cedar Rapids , Iowa , raised money to send to voulentee
Lapatulllka [165]

Answer:

The tax deduction of the contributions.

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The claiming of tax deduction of all money raised for the natural disaster in California. Since the Ladies Aid Society is presumably, a non-profit organization then its contributors may claim tax deduction, on their contributions according to Iowa State.

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