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Rina8888 [55]
3 years ago
6

Interior Airline is expected to pay a dividend of $3 in the upcoming year. Dividends are expected to grow at the rate of 10% per

year. The risk-free rate of return is 4%, and the expected return on the market portfolio is 13%. The stock of Interior Airline has a beta of 4. Using the constant-growth DDM, the value of the stock is _________. A. $41.67 B. $10 C. $27.78 D. $22.73
Business
1 answer:
Oksanka [162]3 years ago
4 0

Answer:

$10

Explanation:

Interior airline is expected to make a dividend payment of $3

The growth rate of the dividend is 10%

The risk free rate of the return is 4%

The expected return on the market portfolio is 13%

The stock beta of interior airline is 4

The first step is to calculate the cost of equity

r= 4% + 4(13%-4%)

r= 4% + 4(9)

r= 4% + 36

r= 40%

Therefore, the value of the stock using the constant growth DMM can be calculated as follows

Value of the stock= 3/(40/100-10/100)

= 3/(0.4-0.1)

= 3/0.3

= $10

Hence the value of the stock is $10

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1.(Sunk Cost and Choice) Suppose you go to a restaurant and buy an expensive meal. Halfway through, despite feeling quite full,
IrinaK [193]

Answer:

Sunk cost. The individual is still considering sunk cost in making future decisions

Explanation:

Sunk cost is cost that has already been incurred and cannot be recovered. It should not be considered in making future decisions.

In this question, the money paid for the meal is the sunk cost and it shouldn't be considered in making the decision of whether to continue the meal or not to.

I hope my answer helps you

7 0
3 years ago
When president obama was elected, the u.s. economy was in trouble, and has slid into a recession. consumer spending was low and
scoundrel [369]

Answer: Keynesian Economic Theory

Explanation: The policy adopted by the President was to cut back taxes and increase government spending on road, bridges and schools. This policy of the government is called the expansionary fiscal policy which is used to combat an economy suffering from recession. The Keynesian theory also supports the argument that when an economy is suffering from recession, economic output is influenced by aggregate demand. Thus, the government and use its fiscal policy tools to bring the economy out of recession. It also supports that the Fed can also use its monetary policy to bring the economy out of recession. But since here taxes and government spending are uses, we can say that Obama was a proponent of Keynesian Economic theory.

6 0
3 years ago
Raw materials, human resources, energy, equipment, financial resources, and information are ________ for an organization.
Westkost [7]

Inputs are raw materials, human resources and energy required by an organization.

<h3>What is an input?</h3>

Inputs are any resources used to create goods and services. They are the resources used in completing a task and typically include time and efforts.

For a business to be able to manufacture goods and services, such must have what is called input because the input joined together will bring about final output.

Examples of inputs include:

  • Labor
  • Fuel
  • Materials
  • Buildings.

Therefore, Raw materials, human resources, energy, equipment, financial resources, and information are inputs for an organization.

Learn more about input here: brainly.com/question/120040

3 0
3 years ago
Time Warner Inc. is a leading media and entertainment company with businesses in television networks, filmed entertainment, and
ehidna [41]

Answer and Explanation:

a. The cash flow from operating activities using the indirect method is

Net loss $(13,402 )

Add: Depreciation, amortization, and impairments $34,790

Add: Decrease in receivables $1,245

Less: Increase in inventories -$5,766

Less: Decrease in accounts payable -$445

Net cash flow from operating activities $16,442

b. The reasons for net loss but positive cash flow from operations are

Change in current assets, liabilities, depreciation

ANd, the reasons for having a difference is that the operating activities records the cash payment & cash receipt related to operating activities and the rest of things would be ignored

8 0
3 years ago
B. the budgeted indirect-cost driver rate for y based on the number of machine-hours is in excess of x by ________per machine ho
kompoz [17]

$6 per machine-hour
Explanation: X = $300,000 / 30,000 mh = $10.
the budgeted indirect-cost driver rate for y based on the number of machine-hours is in excess of x by $10 per machine hour.

Indirect Costs
Any expense that is indirectly connected with two or more final cost objectives or an intermediate cost target rather than directly with a single, ultimate cost objective is referred to as an indirect cost. It is not considered to be a direct cost. Indirect costs are those that must still be assigned to the various cost objectives after direct costs have been identified and charged directly to the contract or other job. If additional costs incurred for the same purpose under comparable conditions have been included as a direct cost of that or any other final cost aim, no indirect costs may be assigned to that objective.

To learn more about Indirect-Cost
brainly.com/question/24762880
#SPJ4

7 0
2 years ago
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