Answer:
Explanation:
Terminal or horizon date is a point in time where a company's dividend experiences a constant growth rate.
In this case, it is mentioned that non-constant growth rate of 20% will happen for first two years and thereafter, a constant rate of 5%; this means that
D1= 1.25(1.20) =1.5
D2 = 1.5 (1.20)= 1.8
Then starting at D3, there's a constant growth rate = 5% so,
D3 = 1.8 (1.05)= 1.89
D4 = 1.89(1.05)= 1.9845
D5 = 1.9845 (1.05) = 2.0837
.....and so on
Therefore, the horizon date would be at the end of the second year i.e. End of Year 2.
Answer: 16 S&P 500 futures contracts
Explanation:
The number of contracts can be calculated by:
= (1 * beta) × Stock value/(Contract size * Index level)
= 1.35 × 12,000,000 / ( 250 * 3,983)
= 1.35 × 12,000,000 / 995,750
= 16 S&P 500 futures contracts
Answer:
It is <u>safer</u> for a company to issue equity than debt
It is <u>riskier</u> for an investor to buy equity in a company than debt in the same firm
Explanation:
If company issues debt that it has to make fixed interest payments, thus even if company is making losses, it has to pay interest which is not in case of equity. Hence, it is riskier option for the company to raise debt.
On the other, if investor in debt, then he will get fixed interest, thus debt option is relatively cheap than equity for investor
Answer:
1. Problem-solving skills.
2. leadership skills.
3. Attention to detail.
Hope this helps you....!
Explanation:
Answer:
The correct answer is $2,610.
Explanation:
According to the scenario, computation of the given data are as follow:-
We can calculate the the direct labor cost by using following formula:-
Direct labor hour required= Estimated production × Direct labor hour
= 870 × 1÷4 =217.5 hours
Direct labor cost = Direct required labor hour × Rate of labor per hour
= 217.5 hours × $12
= $2,610
According to the analysis, $2,610 is the total amount to be budgeted for direct labor.
