Answer:
year 7
Explanation:
The dividend discount model (DDM) is used to determine the value of stock by discounting the dividend to derive the present value of the stock.
Types of DDM
1.two stage : one stage of rapid growth and a stage of constant growth
3. three stage : one stage of super normal growth, followed by a stage of normal growth and then constant growth
For this company
first 5 years = o dividends
next 2 years = 15%
7th year - constant growth
Shortcomings of the DDM
It doesn't take a control perspective
It is unsuitable for firms that don't pay dividends
The groups that are not considered as losers are:
- <span>Flexible-Income Receivers
Because the amount of money that they would take will be depend on the price of product/service that exist in the market.
- </span><span>Debtors
During the inflation, the value of their receivables will increase which make them take more profit during the process.</span>
Tuttle enterprises are considering a project that has the following cash flow and the weighted average cost of capital (WACC) data. The projected net present value is 074.36.
A project's net present value is the sum of the destiny values of the net coin flows compounded at the desired fee of going back minus the net funding. if safety gives a series of coin flows with an NPV of $50,000 and an investor will pay exactly $50,000 for it, then the investor's NPV is $0. It method they'll earn something the cut price charge is on the security.
Net present value or NPV is the sum of the prevailing value of coins inflows and outflows. In other phrases, it's far the distinction between the present values of cash inflows and the prevailing value of cash outflows over a while.net gift cost shows how a lot of money an assignment or investment will advantage or lose in terms of the present-day budget. future coins drift would not carefully mirror the current cash drift of an undertaking because of the impact of factors along with inflation and lost compound hobby so NPV adjusts for this reason.
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Answer:
Legally sufficient.
Explanation:
The answer is that to constitute consideration, the value of whatever being exchanged must be legally sufficient because this means that consideration must be enough in the terms of the law like comitting to do something that you are otherwise not obligated to do.
Answer:
- 22.27%
- Company should invest in project.
Explanation:
Input the numbers given into an Excel worksheet to find the Internal Rate of Return in the manner shown in the attachment.
The investment will have to be in negative.
The IRR will come out as 22.27%
When evaluating a project based on IRR, invest in the project if the project MARR is less than the IRR as is the case here so the company should invest in this project, all else equal.