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9966 [12]
2 years ago
15

The marketing manager of ToyBiz indicated that due to manufacturing efficiencies and market buzz, a new toy they were about to l

aunch was likely to generate revenue beyond original projections. The lead designer reported that lab tests showed a risk that the toy could malfunction, possibly injuring a user, but that the design met required industry standards. By deciding to launch the toy as designed, what criterion of decision making were company executives ignoring
Business
1 answer:
Yuliya22 [10]2 years ago
6 0

OPTIONS:

A. economic feasibility

B. legality

C. ethicalness

D. practicality

E. functionality

Answer:

C. ethicalness

Explanation:

Ethicalness as to do with the quality of how morally right a a course of action is. It borders on principles of morality. As stated in the question above, it is already a known fact that the toy has  a risk of malfunctioning which could most likely cause injury to the user. Going ahead to launch s toy that can cause injury is morally not right, even though the toy met the set industry standards. We can imply that ethicalness was ignored by the company executive in the decision making.

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Answer:

it's 4, a skill you can use in many different situations

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2 years ago
A public debt which is owed to foreigners can be burdensome because: a foreign interest rates are persistently higher than domes
yulyashka [42]
<span>A public debt owed to foreigners can be burdensome because B) payment of interest reduces the volume of goods. This can usually be seen illustrated in the form of a nation lending another nation money. The debt is public because the whole nation takes it on. The lending nation then is lacking in terms of use by the lending nation.</span>
4 0
3 years ago
Between and , the u. s. dollar ______ against the canadian dollar. between and , the u. s. dollar ______ against the
dybincka [34]

Answer:

would be the dollar value between the US and Canadian

4 0
2 years ago
XYZ Corp issued $600,000 of 9% , 10-year bonds on June 30,2020, for $562,500. This price provided a yield of 10% on the bonds. I
Rom4ik [11]

Answer:

c. $18, 750

Explanation:

The computation of the amount of interest expense i.e. accrued is shown below:

= Issued amount × yield on the bonds × given months ÷ total number of months in a year

= $562,500 × 10% × 4 months ÷ 12 months

= $18,750

The 4 months is calculated from July 1 to October 31

Hence, the correct option is c. $18,750

5 0
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
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