Answer:
The cost of equity using the DCF method: 4.39%.
The cost of equity using the SML method: 15.01%.
Explanation:
a. The cost of equity using the DCF method:
We have: Current stock price = Next year dividend payment / ( Cost of equity - Growth rate) <=> Cost of equity = Next year dividend payment/Current stock price + Growth rate = 0.3 x 1.04/80 + 4% = 4.39%.
b. The cost of equity using the SML method:
Cost of equity = Risk free rate + beta x ( Market return - risk free rate); in which Risk free rate is rate on T-bill.
=> Cost of equity = 6.3% + 1.3 x ( 13% -6.3%) = 15.01%.
Answer:
Amount of Check = $784
so correct option is a. $784
Explanation:
given data
Merchandise on account = $1,000
Long Company returns = $200
credit terms = 2/10
n/30
to find out
What is the amount of the check
solution
we know here that Total Merchandise will be
Total Merchandise = Merchandise on account - returns ....................1
Total Merchandise = $1000 - $200
Total Merchandise = $800
and
discount will be here
Discount = 0.02 × 800
returns = $16
so
Amount of Check will be as
Amount of Check = Total Merchandise - Discount ...................2
put here value
Amount of Check = Total Merchandise - Discount
Amount of Check = $800 - $16
Amount of Check = $784
so correct option is a. $784
Answer:
C. A risk averse investor would choose the economy in which stock returns are independent because risk can be diversified away in a large portfolio.
Explanation:
if stock prices move together, (positive correlation), the volatility of the portfolio will be higher. Higher volatility means higher risk. This is the case with the first economy.
In the second economy however, the stocks are independent of each other meaning there is zero correlation between stocks and hence the portfolio volatility will be much lesser.
As a risk-averse investor you will prefer the portfolio with lower volatility for the same expected return.
Answer:
<em>A(n) </em><em><u>aspirational</u></em><em><u> </u></em><em><u>vision</u></em><em> can help employees feel that they are doing something worthwhile and are part of something important and meaningful</em>
Explanation:
<em>What</em><em> is</em><em> </em><em>aspirational</em><em> vision</em><em>?</em>
<em>Vision Statement</em><em>.</em><em> </em><em>An </em><em>organization</em><em> </em><em>would </em><em>like </em><em>to </em><em>achieve</em><em> </em><em>or </em><em>accomplished</em><em> </em><em>in </em><em>the </em><em>mid</em><em>-</em><em>term </em><em>or </em><em>long </em><em>term</em><em> </em><em>future</em><em>.</em><em> </em><em>It </em><em>is </em><em>in</em><em>t</em><em>e</em><em>nded</em><em> </em><em>to </em><em>serves </em><em>as </em><em>as </em><em>clear </em><em>guide </em><em>for </em><em>choosing</em><em> </em><em>current</em><em> </em><em>and </em><em>future</em><em> </em><em>courses </em><em>of </em><em>action.</em>
Answer:
2. gross investment equals depreciation.
Explanation:
Following Examples is supporting the answer:
Gross investment = $1.3 million.
Depreciation = $1.3 million
Gross Investment = Depreciation
$1.3 million = $1.3 million
Net investment = $1.3 million - $1.3 million = 0 million
Hence proved that Net investment will be zero if gross investment equals depreciation.