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3 years ago

In what circumstances is it most important to use multistage dividend discount models rather than constant-growth models?

Business

1 answer:

patriot [66]3 years ago

5 0

Answer:

when valuing companies with temporarily high growth rates.

Explanation:

Discounted dividend models are methods to assess a company's share price based on the dividends that company will distribute in the future. Also known by its name in English dividend discount model (DDM).

These models are based on the theory that the price of a share must be equal to the price of the dividends that the company will deliver, discounted at its net present value.

If the price of the share in the market is lower than the result obtained by the discounted dividend model, the share is undervalued and therefore it is advisable to buy. If, on the contrary, the market price is higher than the model, it is understood that the share price is too high.

Multistage dividend growth models

It is very difficult for a company to experience the same growth every year as the Gordon model assumes, so multistage models assume different growths for each period.

The most common is to use two or three stage growths, where at first the growths are higher but then tend to stabilize at a smaller constant growth. As for example in early stage companies.

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Sparks Fireworks manufactures and sells fireworks. Their raw materials used is $71,500. Their beginning raw materials inventory

algol13

Answer:

The correct answer would be, $70500

Explanation:

Raw Material Turnover means what amount of raw materials is used within a specific period of time. So the raw material turnover would be calculated by adding the beginning inventory with the amount of material used within the period, and then the remaining material will be deducted. So the whole calculations are shown as follows:

Beginning Raw Material Inventory: $5000

Raw Material Used: $71500

Ending Raw Material Inventory: $6000

Raw Material Inventory Turnover:

Beginning Inventory + Raw Material Used - Ending Raw Material

= 5000+71500-6000= $70500

7 0

3 years ago

John asked Ted why he failed to show up at the study group session. He found out that Ted had had a really tough day.

Kaylis [27]

The answer should be Perception-Checking

Perception checking is where you check someone's behavior, which is how John found out Ted was having a bad day. (based on Teds behavior)

7 0

2 years ago

Suppose an airline determines that its customers traveling for business have inelastic demand and its customers traveling for va

ss7ja [257]

Answer:

The correct answer is that the company should charge more to the business travelers and charges less to the vacationers.

Explanation:

To begin with, the concept called ''elasticity'', in the field of economics, refers to the variation that occurs when a change in one variable affects a change in another variable. Moreover, this concept has many applications regarding if the main subject is the supply of a product or the demand of a product.

Secondly, the price elasticity of demand is an elasticity application in economics that establishes the changes that occur to the demand of a product when the price changes. This elasticity could be inelastic or elastic. In addition, if the price elasticity of demand is inelastic then when the price changes the quantity demanded of that product will not change drastically while in the other hand, if the price elasticity of demand is elastic then when the price changes the quantity demanded of that product will change drastically so therefore the consumers reject the change in the price.

Finally, if the company wants to increase its total revenue then it must increase the price that charges to the business travelers and decrease the price that charges to the vacationers.

8 0

3 years ago

In general, it is a bad move for a company to produce more of a good or service if, by doing so,a. marginal cost exceeds margina

scoray [572]

Answer:

The correct option here is A) marginal cost exceeds marginal revenue

Explanation:

When a company is producing more goods and services, it becomes a bad move because at this point company's marginal cost starts exceeding the marginal revenue , which means with each additional units a company is producing it is losing profit on that unit, so it is better for a company to produce less and try to find that level of output where its marginal cost and revenue are equal because at that level, company would be able to make optimal profits.

7 0

3 years ago

You head a marketing team preparing to launch a revised global marketing campaign for a high-end jewelry and accessory company.

Mice21 [21]

Answer:

You started with selling delicate, antique-looking jewelry across all international markets, with the same theme of "Looking Your Feminine Best.

Explanation:

This alternative does not represent a form of marketing adaptation, as seen in the following strategies adopted for some countries. This can be explained because the main concept of the marketing strategy developed to sell delicate and old-fashioned jewelry in all international markets, contains a central message, which is "Looking for the best for women". The other messages are adapted to attract women from other countries with different values and culture, so there was an adaptation in the developed slogan, but this still encompasses the central message proposed by the company, all messages reflect the search for the best for women.

7 0

3 years ago