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vlabodo [156]
3 years ago
9

When estimating the cost of equity by use of the bond-yield-plus-risk-premium method, we can generally get a good idea of the in

terest rate on new long-term debt, but we cannot be sure that the risk premium we add is appropriate. This problem leaves us unsure of the true value of rs.
True
False
Business
1 answer:
diamong [38]3 years ago
6 0

Answer: True

Explanation: <em> Bond-yield-plus-risk-premium method is used if the entity has publicly listed debt, shapes the bond return. This is therefore effective interest on a organization's long-term debt. </em>

<em>Here equity risk premium approximation can be extremely imprecise,  also fluctuating disorderly, depending on which framework is used.</em>

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Arrange strategic planning analysis in correct order.
Allushta [10]
I would say
division planning
product planning
business planning
corporate planning
5 0
3 years ago
Walmart's decision to build fulfillment centers illustrates which force in​ Porter's Five Forces​ Model?
serg [7]

Answer:

the correct answer is D. threat of new entrants

good luck

5 0
3 years ago
Mathis Co. at the end of 2017, its first year Of operations, prepared a reconciliation between pretax financial income and taxab
hram777 [196]

Answer:

$360,000, $ 900,000, $360,000

Explanation:

Particulars Amount

Income tax payable($1, 800,000 * 30%) $ 540,000

Less: Change in deferred tax asset ($3,000,000 *30%) $ 9,000,000

Add: Change in deferred tax liability ($ 2,400,000 * 30%) $ 720, 000

Income tax expense $ 360,000

Deferred tax asset ($ 3,000,000 *30%) = $ 900,000

Deferred tax asset = $ 900,000 non current

Deferred Tax liability to be recognized($ 1, 200,000 * 30%)  $360,000

check the attached file for well formatted solution

4 0
3 years ago
Capital stock represents: Multiple Choice The amount invested in the business by stockholders when shares of stock were initiall
Nina [5.8K]

Answer:

Explanation:

Capital stock represents: The amount invested in the business by stockholders when shares of stock were initially issued by a corporation.

5 0
3 years ago
Simpkins Corporation does not pay any dividends because it is expanding rapidly and needs to retain all of its earnings. However
bezimeni [28]

Answer:

The answer is "$ 52.17"

Explanation:

Third-year dividend,  D_3 = \$ \ 2.00 Increasing at  80 \ \% per year in years 4 and 5.

\to D_4 = 2.00(1.80)=3.6\\\\\to D_5 = 3.6 (1.80) = 4.48\\\\

Now, rising at a steady rate of 5 percent per year in year 6

\to D_6 = 6.48(1.05) =6.804

\text{Price of the stock} = \frac{Expected \ dividend}{(Required \ return - growth \ rate)}

                            =\frac{6.804}{(0.13 - 0.05)}\\\\ =\frac{6.804}{(0.08)}\\\\ = \$ \ 85.05

The present value of all flows of cash:

= \frac{2.00}{(1.13)^3} + \frac{3.6}{(1.13)^4} + \frac{(4.48+ 85.05)}{(1.13)^5}\\\\ = \frac{2.00}{1.442897} + \frac{3.6}{1.63047361} + \frac{(4.48+ 85.05)}{1.84243518}\\\\ = \frac{2.00}{1.442897} + \frac{3.6}{1.63047361} + \frac{(89.53)}{1.84243518}\\\\= 1.38 +2.20+ 48.59\\\\=52.17

5 0
3 years ago
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