Answer:
The value of the stock at start-up = $67.5
Explanation:
According to the dividend valuation model , the current price of a stock is the present value of the expected future dividends discounted at the required rate of return
This principle can be applied as follows:
The value of stock today is the present value of the future return discounted at the required rate of return
The return can be computed as the ROE × Book value of share
Return = 15%× 30 =4.5
Price of stock today = D× (1+g)/r-g
D= current return, g- growth rate, r-required rate of return
DATA: D= 4.5, g= 5%, r= 12%
PV = 4.5× (1.05)/(0.12-0.05)
= 67.5
The value of the stock at start-up = $67.5
Answer:
Line organization model
Explanation:
Based on the information provided within the question it seems that Party Pros Inc. is using a Line organization model. This is an organizational structure in which power flows from the top to the bottom, meaning that the person at the top is the owner and the individuals in each level of the hierarchy answer to those in the upper levels, all of which are trying to accomplish the same organizational goals. Such as is being described in this situation.
Answer: Yes they did.
Explanation:
Apparent Authority refers to a scenario where a Agent is assumed to have the power to act on behalf of a Principal regardless of if said authority had not being expressly given whether implicitly or otherwise.
It is worthy of note that this power is only valid if the third party in the transaction assumes from the conduct of the agent, that they have such powers to act.
It is stated in the text that there was no question that the brokers had the actual or implied authority to sell the stock meaning that the Principal had not done enough to show that the agents did not have the Authority to act as they did. For this reason, they can indeed be sued under the Principle of Apparent Authority.
Answer:
c) relatively high variable costs
Explanation:
Operating leverage is a ratio that is used to analyze and understand the cost structure of a business. It gives the relation between the variable and fixed cost to the the total cost of running the business.
A business with a large amount of fixed cost relative to variable is said to have a high operating leverage . For such business, operating income would be more volatile because the operating income would not increase in commensurate proportion as sales revenue.
And a company with low operating leverage has low amount of fixed cost relative to variable cost and therefore a relatively high variable costs
Operating leverage is calculated as
Contribution /Earnings before interest and Tax
