This can be worked out as under:
rakhivasavada :
Required Rate of Return r(m) = r(f) + b r(p), where r(f) is the risk free rate and the r(p) is the risk premium and b is beta and therefore:
r(m) = 3.00 + 1.20 * 5.5 = 9.6%.
rakhivasavada :
Hence current price P(0),
= D1/(1+k) +D2/(1+k)^2 + D3/(1+k)^3 + D4/(1+k)^4 + P4/(1+k)^4
D1 = D0 * 1.25 = 1.25*1.25 = 1.25^2
D2 = 1.25D1 = 1.25^3
D3 = 1.25D2 = 1.25^4
D4 = 1.25D3 = 1.25^5
D5 = 1*D4 = 1.25^5 (g = 0, so (1+g) =1)
P4 = D5/k = 1.25^5/0.096
So, P(0)
= 1.25^2/1.096 +1.25^3/1.096^2 +1.25^4/1.096^3 +1.25^5/1.096^4 +1.25^5/(0.096*1.096^4)
= 29.05
rakhivasavada :
I am sure this would help...
rakhivasavada :
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Students learn about how different work places work,and about what sort of work they might enjoy. employers get to "preview" people who might make good workers when they leave school. Schools learn what workplaces are needing from students and can adjust their their curricula to be more relevant.<span />
In the accounting cycle, the last step is to prepare a post-closing trial balance.
Answer:
$60
Explanation:
An individual buys stock at $40 per share. Many years later, the individual dies when the market value is $60. The estate distributes the shares to a beneficiary when the stock is worth $70. Therefore the cost basis to the beneficiary is
The cost basis by definition is usually equal to the fair market value of the property or asset at the time of the decedent's death or when the actual transfer of assets was made.
However for the purpose to be served to reduce the tax due on the inheritance, we have chosen to opt for the fair market value of the property or asset at the time of the decedent's death which is $60
Answer:
Option "D" is the correct answer to the following question.
Explanation:
A monopoly usually has all kinds of social costs. Price under monopoly is more than marginal cost, which also often means that society does not have the economic capacity.
In monopoly business, resources are usually used less and other businesses use more resources, which is why monopoly business is usually associated with social interests.
Monopoly businesses produce fewer goods but charge more on those goods because they are the sole producers of the services or goods they produce, so all three options are correct
