Answer:
The value of the firm's stock is $703,920
The price is $5.63 per share ($703,920/125,000 shares)
Explanation:
a) Data and Calculations:
Free cash flows = $200,000
Present value of the free cash flows = $200,000 x Annuity Factor, for 5 years at cost of capital of 15% x (1 + growth rate)
= $200,000 x 3.352 x 1.05
= $703,920
Therefore, common equity = $703,920
To calculate Company XYZ's free cash flows in their present value, they are discounted, using the present value table. The resulting amount is equivalent to the value of the common stock. The company's free cash flow is the amount that is left after settling operating expenses and capital expenditure.
Answer:
d. not liable because the consideration is in the past.
Explanation:
In order for a valid contract to exist (and then be breached), consideration must be exchanged between the parties involved. E.g. if I just decide to give money to my school because of the good education I got there, it is considered a gift. The consideration from the school took place in the past, it is not exchanging anything with me right now.
The same happens here, the consideration which is the years served is part of the past, nothing is being exchanged in the present. This should be considered a gift from the employer.
a. any type of activity that requires movement
Physical activity is defined as any type of activity that requires movement. The other responses represents some form of physical activitity, but they do not define what the words actually means. Grocery shop is not a sport nor a planned activity, but it is still a physical activity, so with this example it is possible to deduce that any type of activity that requires movement is a physical activity.
Answer:
price per unit times the number of units sold.
Explanation:
total revenue = total number of units sold x price per unit
the other options are incorrect because:
- the variable cost per unit times the number of units sold = total variable costs
- the change in revenue when one additional worker is hired = marginal revenue product of the additional worker
- firms seek to maximize profits, not revenue