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Allisa [31]
3 years ago
8

Which of the following statements is NOT CORRECT? a. An important step in applying the corporate valuation model is forecasting

the firm's pro forma financial statements. b. The corporate valuation model can be used both for companies that pay dividends and those that do not pay dividends. c. The corporate valuation model can be used to find the value of a division. d. Free cash flows are assumed to grow at a constant rate beyond a specified date in order to find the horizon, or continuing, value. e. The corporate valuation model discounts free cash flows by the required return on equity.
Business
1 answer:
KIM [24]3 years ago
4 0

Answer:

E. The corporate valuation model discounts free cash flows by the required return on equity.

You might be interested in
Bank A pays 10% interest compounded annually on deposits, while Bank B pays 9% compounded daily. a. Based on the EAR (or EFF%),
Pie

Answer:

Bank A should be chosen.

Explanation:

Given:

Effective annual rate (EAR) of bank A = 10%

Bank B pays 9% compounded daily. EAR of bank B is calculated below:

EAR = ( 1+\frac{i}{n})^{n} -1

Where, i is 0.09

            n is compounding period that is 365 (since it is compounded daily)

EAR = ( 1+\frac{0.09}{365})^{365} -1

       = 1.0942 - 1

       = 0.0942 or 9.42%

Bank B pays EAR of 9.42%

Based on EAR, Bank A should be selected as it pays higher EAR of 10%.

3 0
2 years ago
The more conservative a firm's management is, the higher its total debt to total capital ratio [measured as (Short-term debt Lon
PtichkaEL [24]

Answer:

False

Explanation:

The conservative approach is that the firm has greater level of working capital investment than the competitor or industry average. So to fund the higher level of working capital the company has a set of policy and targets related to the level of debt level which means the company will not be willing to borrow further money if their borrowing exceeds the set limit or benchmark. They might use the equity instruments (Preferred stock or Common equity) to fund the higher level of working capital.

So their no absolute argument whether the denominator will increase or the nominator will increase in the Total debt to capital ratio. Hence the statement is false.

8 0
3 years ago
Jeff was in a department store standing near a clothing rack. Store security felt that he was acting suspiciously because he was
liraira [26]

Answer:

c. No; the facts of this situation do not provide reasonable grounds for a stop and search. Any attempt to do so by store security could result in a claim of false imprisonment.

Explanation:

According to the situation described in the question above, store security has no right to stop and search for Jeff. Therefore, the letter c is the most correct answer to this question.

Jeff's actions in the store do not provide sufficient reasons for there to be any kind of stop and research, as the facts in the situation do not provide enough information about an illegal act, so if store security forces a situation there could be legal damage to the store .

Therefore, it is essential that stores adopt a theft prevention strategy, with an effective security system and a team prepared to carry out correct approaches.

4 0
3 years ago
Suppose you purchased 500 shares of Jet-Electro Corporation stock at a price of $22.50 per share. One year later, the shares are
viva [34]

Answer:

C) 0.0 percent

Explanation:

The net return on any investment is what we receive from the investment in addition to the purchase price paid.

In the given instance the investor pays $22.50 per share as an investment cost, to acquire such shares. Number of shares purchased = 500

Now at the end of the period the shares are sold for $21 each

Also the dividend per share received is $1.50

Thus, total return = $21 + $1.50 = $22.50 per share.

This is exact same as that of the investment price.

Thus net return = Total benefits - Cost = $22.50 - $22.50 = $0

Since net return is $0 the value of return in percentage shall also be $0.

6 0
3 years ago
What are the two most popular ways people make networking contacts?
Semmy [17]

Answer:

Explanation:

Every contact you meet should lead you to new contacts. That's why it's called networking – just like a net, every connection leads off in two or more directions. Your contacts fall into two groups: those who you immediately know might be able to help you, and those who you don't see any point in talking to.

5 0
2 years ago
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