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satela [25.4K]
3 years ago
6

To estimate the value of a nonconstant growth stock, we can estimate the value of each dividend during the period of nonconstant

growth, find the PVs of these dividends, find the value of the stock at the horizon date, find the PV of the horizon value, and then sum these PVs to find the value of the stock today. True or false
Business
1 answer:
garri49 [273]3 years ago
3 0

Answer:

The correct answer is True.

Explanation:

The Gordon growth model is a method of valuing a company's share price, using constant growth and discounting the value of future dividends today. Gordon Growth is often known by its English name.

It is a dividend discount model that assumes that the growths that the company will experience are constant. It is based on the theory that the price of a share should be equal to the price of the dividends that the company is going to pay, discounted to its net present value.

If the share price in the market is less than the result obtained by the discounted dividend model, the share is undervalued and therefore, it is recommended to buy. If, on the other hand, the market price is higher than that of the model, it is understood that the share price is too high.

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The Pawnshop would be the highest risk for the customer.
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3 years ago
Define return economics.​
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Answer:

also known as a financial return, in its simplest terms, is the money made or lost on an investment over some period of time. A return can be expressed nominally as the change in dollar value of an investment over time.

Explanation:

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3 years ago
Vetox sells industrial chemicals. One of their inputs can be purchased in either jugs or barrels. A jug contains one gallon, whi
soldier1979 [14.2K]

Answer:

D. They might order a greater number of gallons with jugs or with barrels, depending on various factors like the demand rate, ordering cost, and holding cost.

Explanation:

Let us assume the following things  

D be the demand rate

P be the Unit cost

H be the holding cost per gallon per months

S be the  ordering cost

Now the economic order quantity is  

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3 0
2 years ago
The Southern Bell Company manufactures 2,000 telephones per year. The full manufacturing costs per telephone are as follows:
Degger [83]

Answer:

The company should buy the units because it will save $10,000.-

Explanation:

Giving the following information:

Make in-house:

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Avoidable fixed cost= $8,000

Buy:

Unitary cost= $15

<u>First, we will determine the total cost of each option:</u>

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Buy= 15*2,000= $30,000

The company should buy the units because it will save $10,000.-

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