Answer:
B. real-options perspective.
Explanation:
Based on the scenario being described within the question it can be said that this approach to strategic alliance is referred to as a real-options perspective. This perspective refers to the ability of an individual or company to have the freedom to choose between logical financial options in capital investments in order to try and make the best choices and decisions. Which is what Elegance Inc. did when they saw that the company they were supporting was most likely to fail due to their unforeseen problem.
Answer:
$614,457
Explanation:
The present value of the annual cash inflow of $100,000 for ten years can be found by the following formula:
Present Value = Annual Cash Inflow * Annuity Factor (Step 1)
Here
annuity Factor at 10% for 10 years time is
By putting values we have:
Present Value = $100,000 × 6.14457 = $614,457
Step 1 : Annuity Factor
Annuity Factor = (1 - (1 + r)^-n) / r
Here r is 10% and n is 10 years.
So by putting values, we have:
Annuity Factor = (1 - (1 + 10%)^-10) / 10% = 6.14457
Option b. 7.78% is the correct answer. The cost of equity from retained earnings is 7.78% as per the CAPM approach
The relationship between systematic risk, or the general dangers of investing, and expected return for assets, particularly stocks, is described by the Capital Asset Pricing Model (CAPM).
A linear relationship between the required return on investment and risk is established by this financial model.
Retained earnings refer to the total earnings that a company has generated from its operations minus the dividends distributed among shareholders. The retained earnings are earnings reinvested in the business.
The calculation is shown below.
Cost of equity = Risk-free rate + (beta * Market risk premium)
Cost of equity = 4.10% + (0.70 * 5.25%)
Cost of equity = 4.10% + 3.675%
Cost of equity = 7.77% or 7.78%
Learn more about retained earnings:
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Answer:
a.consumer choices
Explanation:
why because the consumers picks the households
Probly more than a million becuz of everyone's tacrs
