The license of the business could be revoked
Upper-level management uses responsibility accounting <u>performance reports</u> to evaluate the effectiveness of lower-level managers in controlling costs and expenses and keeping within budgeted amounts.
A performance report is a file that a corporation creates to outline and degree its basic success. It presents an outline of ways the commercial enterprise is performing. To do that, overall performance reports in particular collects particular work performance information, analyze it, and offer guidelines to assist in making selections.
A performance report should compare results with regards to earlier years' consequences in order to reveal whether or not overall performance is strong, improving, or declining. To higher contextualize the performance facts with regards to ancient performance and objectives or dreams that might have been set.
Management is the administration of an organization, whether it's for an enterprise, a non-earnings organization, or a central authority body. it is the art and technological know-how of dealing with assets of the commercial enterprise.
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Answer and Explanation:
The computation is given below:
NAV = (Total value - Liabilities) ÷ Number of shares outstanding
= ($260M - $2M) ÷ 6M
= $258M ÷ 6M
= $43
b. The premium or discount is
= (Market price - NAV) ÷ NAV
= ($40 - $43) ÷ $43
= -$3 ÷ $43
= -0.06976 or -6.98%
So here the fund should be sold at 6.98% discount
Answer:
11.99%
Explanation:
For computing the estimation of cost of equity, first we have to determine the cost of equity based on CAPM which is shown below:
In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below
Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
= 5% + 1.1 × 7%
= 5% + 7.7%
= 12.7%
The (Market rate of return - Risk-free rate of return) is also known as market risk premium and the same is shown in the computation part.
Now the cost of equity based on growth rate which is shown below:
= Current year dividend ÷ price + Growth rate
where,
The current dividend would be
= $1.40 + $1.40× 7%
= $1.40 + $0.098
= $1.498
The other things would remain the same
So, the cost of common equity would be
= $1.498 ÷ $35 + 7%
= 0.0428 + 0.07
= 11.28%
Now the best estimation would be
= (12.7% + 11.28%) ÷ 2
= 11.99%
