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viktelen [127]
3 years ago
14

Todd Mountain Development Corporation is expected to pay a dividend of $3 in the upcoming year. Dividends are expected to grow a

t the rate of 10% per year. The risk-free rate of return is 8%, and the expected return on the market portfolio is 18%. The stock of Todd Mountain Development Corporation has a beta of 0.60. Using the constant-growth DDM, the intrinsic value of the stock is _________.
Business
1 answer:
PtichkaEL [24]3 years ago
8 0

Answer:

$75

Explanation:

As per the data given in the question,

Ke = risk free rate of return + beta×(market portfolio - risk free rate of return)

= 8% + 0.60 × (18% - 8%)

= 8% + 6%

= 14%

= 0.14

Now using the constant-growth DDM model :

Intrinsic value of the stock = Dividend ÷ (Ke - expected growing rate)

= $3 ÷ (0.14-0.10)

= $75

Hence, Intrinsic value of the stock is $75.

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During its first year of operation Mazer Manufacturing Company produced 2,000 units of inventory and sold 1,800 units. Mazer inc
Crazy boy [7]

Answer:  The amount of gross margin Mazer would report if the company uses absorption costing is $1350.

Explanation:

Given that,

Mazer Manufacturing Company produced = 2,000 units of inventory

Units Sold = 1,800 units

Variable product cost = $4 per unit

Fixed manufacturing overhead cost =  $2,500

Sales price of the products = $6 per unit

Fixed manufacturing cost per unit = \frac{Total\ cost}{units\ produced}

= \frac{2500}{2000}

= $1.25 per unit

Unit Product cost under Absorption costing = Variable product cost + Fixed manufacturing cost per unit

= 4 + 1.25

= $5.25

∴ Gross margin under Absorption costing = Sales Revenue - Cost of goods sold

= Units sold × sales price - Units sold × Unit Product cost under Absorption costing

= 1800 × 6 - 1800 × 5.25

= 10800 - 9450

= $1350

5 0
3 years ago
What is capital? in your own words. economics.​
Bezzdna [24]

Answer:

In finance and accounting, capital generally refers to financial wealth, especially that used to start or maintain a business. ... In classical economics, capital is one of the four factors of production. The others are land, labor and organization

4 0
2 years ago
during an external information search, a consumer is most likely to enlarge his search and consider more alternative brands when
iren2701 [21]

During an external information search, a consumer is most likely to enlarge his search and consider more alternative brands when the<u> perceived risk of the </u><u>product or service </u><u>to be purchased increases.</u>

This is further explained below.

<h3>What is <u>a product</u>?</h3>

Generally, A physical thing that is offered for sale for purchase, attention, or consumption is referred to as a commodity.

On the other hand, an intangible item that comes from the work of one or more humans is referred to as a service.

In conclusion, When a customer perceives an increased level of risk associated with the product or service that will be bought, he is more likely to broaden the scope of his search and take into consideration a greater number of alternative brands.

This occurs during an external information search.

Read more about <u>product </u>

<u>brainly.com/question/22852400</u>

#SPJ1

8 0
8 months ago
1 Gopal is the CEO of Gopal Leisure (GL). GL has a tall
Alexandra [31]

A manager is known to be a person  that does the work of supervising and motivating employees and they also aid or direct the progress of a firm.

<h3>What are the types of organizational structures?</h3>

An organizational structure is known to be a  system that states out how the activities in a firm are directed so as to achieve the goals of the firm.

There are four types of organizational structures. They are;

  • Functional
  • Divisional
  • Flatarchy
  • Matrix structures.

Learn more about manager from

brainly.com/question/24553900

3 0
2 years ago
Net income (in millions) $150 Shares outstanding (in millions) 300 Stock price $30.00 What is the price-earnings ratio (to the n
Aloiza [94]

Answer:

60

Explanation:

price-earnings ratio = price / earnings per share

earnings per share = net income / shares outstanding = $150 / 300 = $0.50

$30 / $0.50 = 60

3 0
3 years ago
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