Answer:
The required rate of return is 11%
Explanation:
Dividend valuation method calculated the value of stock based on dividend payment, growth rate and required rate of return.
Use following formula to calculate the the required rate of return
Price = Dividend / ( Required Rate of return - Growth rate )
20 = $1 / ( Required Rate of return - 6% )
20 = $1 / ( Required Rate of return - 0.06 )
Required Rate of return - 0.06 = $1 / $20
Required Rate of return - 0.06 = 0.05
Required Rate of return = 0.05 + 0.06
Required Rate of return = 0.11
Required Rate of return = 11%
Answer:
(b) short futures position
Explanation:
The short futures position is an unlimited profit, unlimited risk position that can be entered by the futures speculator to profit from a fall in the price of the underlying.
The short futures position is also used by a producer to lock in a price of a commodity that he is going to sell in the future.
Answer:
No impairment
Explanation:
Since the future net cash flows are still recoverable and they are higher than carrying amount, none needs to be reported
Desire, Ability, and Willingness.
Desire- do people want to buy the product?
Ability- are they able to buy it? (do they have enough money, etc)
Willingness- are people willing to buy this product instead of something else?
