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Ghella [55]
3 years ago
14

The valuation of a financial asset is based on the concept of determining the present value of future cash flows that this finan

cial asset will accumulate.
True / False.
Business
1 answer:
Alina [70]3 years ago
3 0

Answer:

True.

Explanation:

To assess the value of an asset, it is important to determine if its future cash flows will make it worth for an investor to buy it in the present. The present value (PV) of a financial asset is the <em>value in the present</em> of all future cash flows the asset is expected to generate by using a discount rate.

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When a company offers consumers the ability to make purchases via a smart phone, this is known as:?
Marrrta [24]
Mobile payment or mobile money transfer is where a transaction is paid via a smart phone. 
7 0
4 years ago
Assume that Zonk is a potential leveraged buyout candidate. Assume that the buyer intends to put in place a capital structure th
vekshin1

Answer:

A.8.85%

Explanation:

Computation to determine the weighted average cost of capital for Zonk based on the new capital structure.

First step is to calculate the Cost of equity capital using this formula

Cost of equity capital = Risk free rate + (Beta*Market premium)

Let plug in the formula

Cost of equity capital = 2.3% + (1.13*5.3%)

Cost of equity capital=8.28%

Now let determine theWeighted average cost capital

Weighted average cost capital = [.70*.14*(1-.35)]+(.30*.0828)

Weighted average cost capital= [.70*.14*.65]+.02484

Weighted average cost capital=0.0637+.02484

Weighted average cost capital= .0885*100

Weighted average cost capital= 8.85%

Therefore the weighted average cost of capital for Zonk based on the new capital structure is 8.85%

4 0
3 years ago
According to financial planners, the average retiree requires approximately 70% of their last year’s working salary (answer to #
Anna35 [415]

Answer:

Our answer is 2430798.798

Explanation:

. 70% of pre-retirement salary should be equal to the interest that we get from savings(5% of savings).

Therefore, 0.7 × 173628.4856 = 0.05×savings

==> savings = 2430798.798

3 0
3 years ago
Surrender of shares is the same thing as forfeiture of shares comment
Nimfa-mama [501]

Answer:

False

Explanation:

The main difference between "Surrender of Shares" and "Forfeiture of shares" is the existence of compulsiveness. Although the two terms result in the loss of shares, the "Surrender of Shares" is done voluntarily, when the company or the shareholder decides to return the shares. The "Forfeiture of shares" occurs when the shares are taken compulsorily, due to non-payment or failure to meet deadlines.

6 0
3 years ago
6. Norris Enterprises, an all-equity firm, has a beta of 2.0. The chief financial officer is evaluating a project with an expect
Aleksandr [31]

Answer:

D: The accept/reject decision depends on the firm's risk-adjustment policy. If Norris' policy is to increase the required return on a riskier-than average project to 3% over rs, then it should reject the project

Explanation:

Please refer the complete question:

Which of the following statements is correct?

a. The project should definitely be accepted because its expected return (before any risk adjustments) is greater than its required return.

b. The project should definitely be rejected because its expected return (before risk adjustment) is less than its required return.

c. Riskier-than-average projects should have their expected returns increased to reflect their higher risk. Clearly, this would make the project acceptable regardless of the amount of the adjustment.

d. The accept/reject decision depends on the firm's risk-adjustment policy. If Norris' policy is to increase the required return on a riskier-than-average project to 3% over rS, then it should reject the project.

e. Capital budgeting projects should be evaluated solely on the basis of their total risk. Thus, insufficient information has been provided to make the accept/reject decision.

7 0
3 years ago
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