How does an error that results in an overstatement of ending inventory affect the elements of the company's financial statements
1 answer:
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Answer:
Intrinsic value of the stock = $50
Explanation:
Dividend paid in the upcoming year, D = $3
Dividends are expected to grow at the rate, g = 8% per year
Risk-free rate of return, Rf = 5%
Expected return on the market portfolio, Rm = 17%
Beta = 0.75
Intrinsic value of the stock, Po = ?
Calculating Cost of Equity (Ke)-
Ke = Rf + Beta (Rm - Rf)
Ke = .05 + 0.75 (0.17 - 0.05)
Ke = 0.05 + 0.09
= 0.14
Ke = 14%
Calculating Intrinsic value of stock (P0)
Po = $50
Answer:
See explaination and attachment
Explanation:
We can look at The project total time-cost relationship to be determined by adding up the direct cost and indirect cost values together. The optimum project duration can be determined as the project duration that results in the least project total cost.
To have a clearer understanding of the solution given please check attachment for the detailed step by step solution of the solution of the given problem.
