Using the Gordon Growth Model (a.k.a. Dividend Discount Model), the intrinsic value of a stock can be calculated, exclusive of current market conditions. In this model, the value of the stock is equated to the present value of the stock's future dividends.
<span>Value of stock (P0) = D1 / (k - g)
</span>where
D1<span> = </span><span>expected annual </span>dividend<span> per share in the following year </span>
<span>k = the investor's discount rate or required </span>rate of return
g = the expected dividend growth rate
<u>From the problem:</u>
The value of stock is $10.80
D1 is $0.40
g is 0.08
k is unknown
Solution:
Rearranging the equation for Gordon Growth Model to solve for k:
k = (D1/P0) + g
Substituting the variables with the given values,
k = (0.40/10.80) + 0.08
k = 0.1170
In percent form, this is
0.1170 * 100% = 11.70%.
Thus, the total rate of return on the stock is 11.70%.
Answer:
$15 million
Explanation:
The three investors' total investments would add up to 100% or 1.
The first two invested in the ration of 2:3
It means ;
Investor 1: 2/5
Investor 2: 3/5
If investor 3 invested twice as investor 1 and 2, then we can deduce that he invested ( 2/5 + 3/5) x 2
the new denominator is 10, meaning
Investor 1 had 2/10,
investor 2 had 3/10
investor 3 had 5/10
If total investments were $30 million, then the highest investor invested
5/10 x $30million
=0.5 x $30 million
=$15 million
B. false
A one brand name strategy would be like McDonalds, Call everything the McRib, McDouble, it makes it nationlized, not localized
Answer:
E. separation, self-service, automation, and scheduling.
Explanation:
Increase in productivity in a business aims to increase the efficiency of an individual or process involved in production of useful output.
Strategies for improving productivity includes separation, self-service, automation, and scheduling.
When there is seperation in services available to a customer, they easily identify the most relevant one to them.
Self service gives control of the process to the customer, resulting in greater satisfaction.
Automation reduces the turnaround time of processes and refocuses labour to more complex activities. So production efficiency increases.
Scheduling reduces time wastage by assigning time to complete activities.
Answer and Explanation:
According to the scenario, journal entry for the given data are as follows:
Cash A/c Dr. $1,000
Supplies A/c Dr. $3,000
Land A/c Dr. $8,000
Equipment A/c Dr. $5,000
To A/c Payable A/c $4,500
To Notes payable A/c $3,100
To M. Derr capital A/c $9,400 ($1000+$3000+$8000+$5000-$4500-$3100)
(Being Derr's investment is recorded)
