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3 years ago

Although many factors affect the value of real property, what is the primary driver in determining the value of real property?

Business

1 answer:

garri49 [273]3 years ago

5 0

Answer:

Supply and Demand

Explanation:

Although there are many factors which are given below:

1. Location of the real property

2. Supply and demand

3. The rate of interest

4. Population size

5. Market trends of property, etc

But the primary driver is supply and demand because if the demand of the property rise than the supply, the price of real property is rising whereas if the supply of the property is rise than the demand, the price of real property is declining

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All of the following statements are correct about management by exception except it

noname [10]

Answer:

<u>means that management has to investigate every budget difference.</u>

Explanation:

Management has an exception as the practice f examining the financial and operational results of a business. Only bringing the issues to the attention of management when substantial differences in budgets or within the expected amount.

The concept assumes that business managers handle cases that derive them from the norms and have the main disadvantage of calculation mistakes that results from a large variety of data and finding errors to be consuming activity.

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3 years ago

Instructions: Please make sure that you show all your work when solving the problems. Feel free to make any assumptions whenever

My name is Ann [436]

Answer:

Explanation:

From the given information:

The current price = $\dfrac{Dividend(D_o) \times (1+ Growth \ rate) }{\text{Cost of capital -Growth rate}}$

$15 = \dfrac{0.50 \times (1+ Growth rate)}{8\%-Growth rate}$

$15 \times (8 -Growth \ rate) = 0.50 +(0.50 \times growth \ rate)$

$1.20 - (15 \times Growth \ rate) = 0.50 + (0.50 \times growth \ rate)$

$0.70 = (15 \times growth \ rate) \\ \\ Growth \ rate = \dfrac{0.70}{15.50} \\ \\ Growth \ rate = 0.04516 \\ \\ Growth \ rate \simeq 4.52\% \\ \\$

2. The value of the stock

Calculate the earnings at the end of 5 years:

$Earnings (E_o) \times Dividend \ payout \ ratio = Dividend (D_o) \\ \\ Earnings (E_o) \times 35\% = \$0.50 \\ \\ Earnings (E_o) =\dfrac{\$0.50}{35\%} \\ \\ = \$1.42857$

$Earnings (E_5) year \ 5 = Earnings (E_o) \times (1 + Growth \ rate)^{no \ of \ years} \\ \\ Earnings (E_5) year \ 5 = \$1.42857 \times (1 + 12\%)^5 \\ \\ Earnings (E_5) year \ 5 = \$2.51763$

Terminal value year 5 = $\dfrac{Earnings (E_5) \times (1+ Growth \ rate)}{Interest \ rate - Growth \ rate}$

$=\dfrac{\$2.51763\times (1+0.04516)}{8\%-0.04516}$

=$75.526

Discount all potential future cash flows as follows to determine the stock's value:

$\text{Value of stock today} =\bigg( \sum \limits ^{\text{no of years}}_{year =1} \dfrac{Dividend (D_o) \times 1 +Growth rate ) ^{\text{no of years}}}{(1+ interest rate )^{no\ of\ years} }$

$+ \dfrac{Terminal\ Value }{(1+interest \ rate )^{no \ of \ years}} \Bigg)$

$\implies \bigg(\dfrac{\$0.50\times (1 + 12\%)^1) }{(1+ 8\%)^{1} }+ \dfrac{\$0.50\times (1+12\%)^2 }{(1+8\% )^{2}}+ \dfrac{\$0.50\times (1+12\%)^3 }{(1+8\% )^{3}} + \dfrac{\$0.50\times (1+12\%)^4 }{(1+8\% )^{4}} + \dfrac{\$0.50\times (1+12\%)^5 }{(1+8\% )^{5}} + \dfrac{\$75.526}{(1+8\% )^{5}} \bigg )$

$\implies \bigg(\dfrac{\$0.5600}{1.0800}+\dfrac{\$0.62720}{1.16640}+\dfrac{\$0.70246}{1.2597}+\dfrac{\$0.78676}{1.3605}+\dfrac{\$0.88117}{1.4693}+ \dfrac{\$75.526}{1.4693} \bigg)$

=$ 54.1945

As a result, the analysts value the stock at $54.20, which is below their own estimates.

3. The value of the stock

Calculate the earnings at the end of 5 years:

$Earnings (E_o) \times Dividend payout ratio = Dividend (D_o) \\ \\ Earnings (E_o) \times 35\% = \$0.50 \\ \\ Earnings (E_o) =\dfrac{\$0.50}{35\%}\\ \\ = \$1.42857$

$Earnings (E_5) year \ 5 = Earnings (E_o) \times (1 + Growth \ rate)^{no \ of \ years} \\ \\ Earnings (E_5) year \ 5 = \$1.42857 \times (1 + 12\%)^5 \\ \\ Earnings (E_5) year \ 5 = \$2.51763 \\ \\$

Terminal value year 5 = $\dfrac{Earnings (E_5) \times (1+ Growth \ rate)\times dividend \ payout \ ratio}{Interest \ rate - Growth \ rate}$

$=\dfrac{\$2.51763\times (1+ 7 \%) \times 20\%}{8\%-7\%}$

=$53.8773

Discount all potential cash flows as follows to determine the stock's value:

$\text{Value of stock today} =\bigg( \sum \limits ^{\text{no of years}}_{year =1} \dfrac{Dividend (D_o) \times 1 + Growth rate ) ^{\text{no of years}}}{(1+ interest rate )^{no \ of\ years} }+ \dfrac{Terminal \ Value }{(1+interest \ rate )^{no \ of \ years }} \bigg)$

$\implies \bigg( \dfrac{\$0.50\times (1 + 12\%)^1) }{(1+ 8\%)^{1} }+ \dfrac{\$0.50\times (1+12\%)^2 }{(1+8\% )^{2}}+ \dfrac{\$0.50\times (1+12\%)^3 }{(1+8\% )^{3}} + \dfrac{\$0.50\times (1+12\%)^4 }{(1+8\% )^{4}} + \dfrac{\$0.50\times (1+12\%)^5 }{(1+8\% )^{5}} + \dfrac{\$53.8773}{(1+8\% )^{5}} \bigg)$

$\implies \bigg (\dfrac{\$0.5600}{1.0800}+\dfrac{\$0.62720}{1.16640}+\dfrac{\$0.70246}{1.2597}+\dfrac{\$0.78676}{1.3605}+\dfrac{\$0.88117}{1.4693}+ \dfrac{\$53.8773}{1.4693} \bigg)$

=$39.460

As a result, the price is $39.460, and the other strategy would raise the value of the shareholders. Not this one, since paying a 100% dividend would result in a price of $54.20, which is higher than the current price.

Notice that the third question depicts the situation after 5 years, but the final decision will be the same since we are discounting in current terms. If compounding is used, the future value over 5 years is just the same as the first choice, which is the better option.

The presumption in the second portion is that after 5 years, the steady growth rate would be the same as measured in the first part (1).

8 0

3 years ago

extreme weather in new york, where the super bowl is scheduled to be played, makes people disinterested in purchasing super bowl

alexira [117]

The following scenarios would place a downward pressure on price:

.The Nile River floods this year add an exceptional amount of silt to the soil, resulting in increased crops of cotton.
An outbreak of mad cow disease causes Americans to abstain from eating beef.
Extreme weather in New York, where the Super Bowl is scheduled to be played, makes people disinterested in purchasing Super Bowl tickets.

The following scenarios would place a downward pressure on price:

An impending unclear holocaust causes people to stock up on twonkies, a popular snack cake provided by many companies

<h3>What would lead to either a upward or downward pressure on price?</h3>

There is an upward pressure on price if demand increases or supply reduces. There is a downward pressure on price if demand decreases or supply increases.

As a result of the slit, there would be an increase in the supply of cotton. This would lead to an downward pressure on price. The mad cow disease would lead people to demand less beef. This would lead to an downward pressure on price. The extreme weather would lead to people not coming for the game. This would lead to an downward pressure on price.

Due to the expectation of the holocaust, there would be an increased demand for twonkies. This would lead to an upward pressure on price.

Here is the complete question:

Decide whether each scenario would lead to upward or downward pressure on the equilibrium price for each good in bold font.

1.The Nile River floods this year add an exceptional amount of silt to the soil, resulting in increased crops of cotton.

2.An outbreak of mad cow disease causes Americans to abstain from eating beef.

3. Extreme weather in New York, where the Super Bowl is scheduled to be played, makes people disinterested in purchasing Super Bowl tickets.

4. An impending unclear holocaust causes people to stock up on twonkies, a popular snack cake provided by many companies

For more information about the change in demand, please check: brainly.com/question/25871620

#SPJ1

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2 years ago

Prepare journal entries to record the declaration and payment of these stock and cash dividends. 2. Prepare the December 31, 202

erma4kov [3.2K]

Answer:

Retained Earning (Dr.) $295,000

Stock Dividend Payable (Cr.) $295,000

To record stock dividend

Retained Earnings (Dr.) $157,800

Cash (Dr.) $157,800

To record cash dividend

Explanation:

Statement of Shareholder's Equity

Retained Earnings Beginning Jan 21 $1,275,000

Net Income $2,250,000

Cash Dividend $157,800

Stock Dividend $295,000

Retained Earning Ending $3,072,200

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3 years ago