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3 years ago

Which of the following statements is CORRECT?

Business

1 answer:

rusak2 [61]3 years ago

6 0

Answer:

D. The constant growth model cannot be used for a zero growth stock, where the dividend is expected to remain constant over time.

Explanation:

So, we evaluate each option.

a. We discount the dividends by the required rate of return. So incorrect.

b. The dividend yield is annual dividend per share divided by stick price per share. the 5% is the growth in dividend and not the actual dividend itself. So, incorrect.

c. The constant growth is appropriate for companies whose dividend patterns are stable. Startups have multiple stage growths and this option becomes incorrect as constant growth is not applicable.

d. A zero growth stock is one where dividend remains the same. So when there is no growth in dividend, the constant growth model becomes inapplicable. So, the statement is correct.

So, here we have our correct statement and all others are incorrect.

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Kline Construction is an all-equity firm that has projected perpetual earnings before interest and taxes of $628,000. The curren

ArbitrLikvidat [17]

Based on the information given the levered value of the firm is $3,824,318.

First step is to calculate the Unlevered firm value

Unlevered firm value = EBIT(1 - Tax) / Cost of equity

Unlevered firm value= $628,000 x (1-.35)/.176

Unlevered firm value = $628.000×.65/.176

Unlevered firm value = $2,319,318

Second step is to calculate Levered firm value

Levered firm value = Unlevered firm value + (Tax rate× Debt))

Levered firm value= $2,319,318 + (.35 x $4,300,000)

Levered firm value= $2,319,318 +$1,505,000

Levered firm value = $3,824,318

Inconclusion the levered value of the firm is $3,824,318.

Learn more about levered value here:brainly.com/question/20067496

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2 years ago

Wither Spoon Company requires a new manufacturing facility. It found three locations; all of which would provide the needed capa

suter [353]

Answer:

$42,500 payments at the beginning of each of the next twenty-five years. Assuming Wither Spoon Company's borrowing costs are 8% per annum

Explanation:

Assuming Wither Spoon Company's borrowing costs are 8% per annum

th e option that is least costly to the company is Location C because it only requires $42,500 payments at the beginning of each of the next twenty-five years.

Hence Location A which may be purchased immediately for $500,000 cash and Location B which may be acquired with an immediate down payment of $100,000 and annual payments of $39,900 at the end of each of the next twenty years are not the best option for the company to choose from which therefore makes LOCATION C the best option for Wither Spoon Company because it save cost as as well the least costly to the company.

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3 years ago

The Evanstonian is an upscale independent hotel that caters to both business and leisure travelers. On average, one-third of the

iren [92.7K]

Answer:

Explanation:

1/3rd of the guests are leisure travelers

2/3rd of the guests are business travelers

Average leisure travelers stay for 3.6 nights

Average business travelers stay for 3.6*1/2 = 1.8

It is given that on average day 135 guests check into The Evanstonian (R)

Leisure travelers = 135*1/3=45 guests per day(night)

Average number of leisure travelers = 45*3.6 = 162 guests

Business travelers = 135*2/3 = 90 guests per night

Average number of business travelers = 90*1.8 = 162 guests

Total inventory = Leisure travelers + Business travelers = 162*2 = 324

Inventory turns = R/total inventory = 135/324 = 0.4167 turns per day

per month: 0.4167 * 30 = 12.5 turns

324 rooms are booked for a night on average

We calculated that half of them are booked by leisure and half by business travelers

Therefore, average revenue is 1/2*250 + 1/2* 210 = 125 + 105 = $230

8 0

3 years ago

Assume that the full-employment level of output is $2,000 and the price level associated with full-employment output is 100. Als

olya-2409 [2.1K]

Answer:

The correct answer is option a.

Explanation:

The full-employment level of output is $2,000.

The current level of output is $1,900.

The current aggregate demand is $1,850.

There is a need to increase the aggregate demand by $150 to reach full employment level.

The government increases purchasing by $30.

$Increase\ in\ income\ =\ Change\ in\ government\ spending\ \times\ spending\ multiplier$

$\$ 150\ =\ \$ 30\ \times\ \frac{1}{1-MPC}$

$\$5 = \frac{1}{1-MPC}$

1 - MPC = $\frac{1}{5}$

MPC = 1 - 0.2

MPC = 0.8

6 0

3 years ago

Which of the following is NOT one of the six marketing fundamentals?

irina1246 [14]

Answer:

b. the goal of marketing is to set the price

Explanation:

6 fundamentals of marketing includes: satisfaction of customers needs or demands, continuous nature of marketing, sequential steps in marketing, key role of marketing research, interdependence of hospitality and travel organizations, organization-wide and multi department effort.

The goal of marketing has to to be the satisfaction of customers and the captured value from customers and business relationship.

Plan about price has to be set, adjusted based on the changes and requirements of customers' needs and wants.

5 0

3 years ago