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sladkih [1.3K]
3 years ago
15

Which one of the following should be added to net income in calculating net cash flow from operating activities using the indire

ct method?
a loss on the sale of land
dividends paid on common stock
a decrease in accounts payable
a decrease in accrued liabilities
Business
1 answer:
Lana71 [14]3 years ago
5 0

Answer:

It is loss on the sales of land (A)

Explanation:

Option (A) True -The non-cash  losses must be added back while the gains must be subtracted because cash flow only recognizes relevant cash transactions that either increases or decreases the cash position.

Option (B) False-This will subtracted because it represents cash outflow from the company.

Option (C) False. This will be subtracted because it represents cash outflow resulting from payment made to suppliers

Option (D) False. This will be subtracted because it represents cash outflow resulting from liability settlement.

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Colgate-Palmolive Company has just paid an annual dividend of $ 1.50$1.50. Analysts are predicting dividends to grow by $ 0.12$0
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Answer:

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In order to calculate the price does the​ dividend-discount model predict Colgate stock should sell for​ today we would have to calculate first the Present value of dividend of next 5 years as follows:

Present value of dividend of next 5 years as follows=

Year Dividend Discount factor Present value      

a             b          c=1.085^-a             d=b*c      

1 $       1.62 0.921659 $       1.49      

2 $       1.74 0.849455 $       1.48      

3 $       1.86 0.782908 $       1.46      

4 $       1.98 0.721574  $       1.43      

5 $       2.10 0.665045 $       1.40      

Total                                   $       7.25

Then, we have to calculate the Present value of dividend after 5 years as follows:

Present value of dividend after 5 years=D5*(1+g)/(Ke-g)*DF5

Present value of dividend after 5 years=$2.10(1+6%)/(8.50%-6%)* 0.665045

Present value of dividend after 5 years=$59.22

Current value of stock=Present value of dividend of next 5 years+ Present value of dividend after 5 years    

Current value of stock= $7.25+$59.22      

Current value of stock=$66.47        

The price does the​ dividend-discount model predict Colgate stock should sell for​ today is $66.47

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