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anzhelika [568]
4 years ago
13

A firm's current profits are $650,000. These profits are expected to grow indefinitely at a constant annual rate of 5 percent. I

f the firm's opportunity cost of funds is 7 percent, determine the value of the firm:Round your responses to 2 decimal places.a. The instant before it pays out current profits as dividendsb. The instant after it pays out current profits as dividends.
Business
1 answer:
Komok [63]4 years ago
7 0

Answer:

before disrtibution of dividends: 34,125,000

                     after distribution:    33,475,000

Explanation:

we will calculate this using the gordon model for dividen grow but using the firm income asdividends instead:

\frac{income_1}{return-grow} = firm \: Value

income zero: 650,00

income next year: 650,000 x 1.05 = 682,500

return 7%

grow 5%

\frac{682,500}{0.07 - 0.05} = firm \: Value

firm value: 34.125.000‬

once it distribute dividends, the equity will decrease by that ammount:

34,125,000 - 650,000 = 33,475,000

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6 0
3 years ago
Acme Global hired a director of safety to help the organization ensure proper compliance with the Occupational Safety and Health
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Answer:

The action of ACME global represent the influence of  Government  in the external environment of an organisation

Explanation:

The external environment of an organisation represents the factors outside the environment that is capable  of influencing  the decision of the organisation.  It consists of the outside factors that influences the organisation.  e.g social cultural, political, economic, technological  factors among others.

One of these factors is the Political/ Legal factor:

The political / legal factor focuses on the influence of government on business organisations. It reviews how government laws, policies, and rules affects the operation of business. The rules and regulations or policies put in place by the government has the capacity to influence the business decision.

In the case of ACME global hiring a director of safety, they are doing so in other to comply to the occupational safety and Health Act that is most definitely enacted by the government.

Therefore we can say that  the action of ACME global represent the influence of  Government  in the external environment of an organisation

5 0
3 years ago
How long a company holds inventory before selling it can be measured by dividing cost of goods sold by the average inventory bal
steposvetlana [31]

The Inventory Turnover Ratio, which can be calculated by dividing the cost of goods sold by the average inventory balance, can be used to measure how long a company keeps inventory before selling it.

Businesses may make better judgments in a range of areas, such as pricing, production, marketing, purchasing, and warehouse management, by measuring and calculating inventory turnover. In the end, the inventory turnover ratio measures how well the business makes sales from its inventory.

Inventory Turnover Ratio = Cost of Goods Sold / Avg. Inventory

Average inventory = (beginning inventory + ending inventory) / 2

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3 0
2 years ago
Oliver's long-term care policy covers only services in a nursing facility and pays nothing for services provided at home or in t
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d. noncomprehensive

Answer:

d. noncomprehensive

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Oliver has a noncomprehensive long term care(LTC). A non comprehensive long term care is policy that restricts services to the ones provided at a nursing facility, and so Oliver pays for the benefits of only the services of a nursing facility . It is different from a comprehensive long term care where services cover and can be provided at an adult day care, home, assisted living facilities, or at nursing facilities.

3 0
3 years ago
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Mama L [17]
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