Answer:
P₀ = $59.45
Explanation:
the numbers are missing so I looked for a similar question:
- expected EPS = $2.775
- retain 0% of earnings (years 1 - 2)
- retain 48% of earnings (years 3 - 4)
- then retain 23%
- expected return on new projects = 22.4%
- Re = 10.7%
growth rate = retention rate x return on new projects
g₁ = not given EPS₁ = $2.775
g₂ = 1 x 22.4% = 22.4% EPS₂ = $3.3966
g₃ = 1 x 22.4% = 22.4% EPS₃ = $4.1574
g₄ = 0.48 x 22.4% = 10.752% EPS₄ = $4.6044
g₅ = 0.48 x 22.4% = 10.752% EPS₅ = $5.0995
g₆ = 0.23 x 22.4% = 5.152% EPS₆ = $5.3622
dividend payout ratio expected dividend
year 1 = 0 $0
year 2 = 0 $0
year 3 = 0.52 $2.1618
year 4 = 0.52 $2.3943
year 5 = 0.77 $3.9266
year 6 = 0.77 $4.1289
since the growth rate became constant at year 6, we can find the terminal value for year 5:
terminal value year 5 = $4.1289 / (10.7 - 5.152%) = $74.4214
P₀ = $0/1.07 + $0/1.07² + $2.1618/1.07³ + $2.3943/1.07⁴ + $3.9266/1.07⁵ + $74.4214/1.07⁵ = $0 + $0 + $1.7647 + $1.8266 + $2.7996 + $53.0614 = $59.45
Answer:
Freemium would be the answer for the First one.
Explanation:
Freemium, a portmanteau of the words "free" and "premium", is a pricing strategy by which a basic product or service is provided free of charge, but money (a premium) is charged for additional features, services, or virtual (online) or physical (offline) goods that expand the functionality of the free version of the software. This business model has been used in the software industry since the 1980s. A subset of this model used by the video game industry is called free-to-play.
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Answer:
True
Explanation:
The reason is that the straight line equation is used to illustrate the relation between the rate of return and the beta factor and is given as under:
Y = a + bX
Here
a = Rf
B = Risk premium = Rm - Rf
X = Beta Factor
So this means the security market line is the graphical presentation of capital asset pricing model and illustrates why the increase in beta factor increases the required rate of return, the reason is that the the overall required return Y of the investment will start increasing with the increase in the beta factor.
So the statement is true.
By spreading the process of travel to allow faster 1 to 1/person to person business.