Economic capital is productive, so it does not include Money.Economic capital is the amount of risk capital held by a financial services company to enable it to survive any difficulties such as market or credit risks. Money is used to purchase various factors such as raw materials, machinery, labor which help in the production of goods, but money itself does not directly help in the production of goods. The real capital consists of machinery, buildings, tools, factories, tractors, etc, which directly assist in the production of goods
<span>Given Data:
</span><span>
The return = 12%</span><span>
Stock price = </span>$43/share
<span>
Dividend = $1.00
Growth rate = </span><span>30% per year
</span> D₄ = $1.00 × (1.30)⁴
<span> = $2.8561.
</span><span>
Stock's expected constant growth rate after t = 4
</span>
Stock's expected constant growth rate:
X = 6.34%
Answer:
True
Explanation:
Prime's net realizable value of accounts receivable = accounts receivable balance - allowance for uncollectible accounts = $100,000 - $7,000 = $93,000
Bad debt expenses have already been debited, so they are no longer part of the allowance for uncollectible accounts.
