Answer:
D: Equity financing
Explanation:
Equity is ownership in the business - equity financing means giving up ownership in order to secure financing.
Answer:
- Stock is overpriced/ overvalued.
- Sell if you own it.
- Don't buy if you don't.
Explanation:
Use CAPM to find the required return on the stock:
Required return = Risk free rate + beta * ( Market return - risk free rate)
= 2.5% + 1.3 * (7% - 2.5%)
= 8.35%
Price based on Constant Dividend Growth Model (CDGM):
Price = Next dividend / (Required return - growth rate)
Next dividend = 1.40 * ( 1 + 4%)
= $1.456
Price = 1.456 / (8.35% - 4%)
= $33.47
<em>Stock is selling for $35. It is overvalued. Don't buy the stock. Sell if you have the stock. </em>
Answer:
B) NDPFC + Indirect Taxes
Explanation:
Net domestic product (NDP) is obtained by subtracting depreciation from gross domestic product (GDP), and it can be calculated at market price (NDPmp) or at factor cost (NDPfc):
- NDPmp = GDPmp – depreciation
- NDPfc = GDPmp – depreciation – indirect taxes
If we substitute NDPfc into option B, we will get:
NDPmp = NDPfc + indirect taxes
NDPmp = (GDPmp - depreciation - indirect taxes) + indirect taxes
NDPmp = GDPmp - depreciation
Answer:
- What is the maximum amount you should pay to purchase a share of Angelina's stock.
$36,00
Explanation:
The dividend discount model state that the price of a stock should be the result of the Present Value of all of its future dividends, the Gordon growth model indicates that:
Price per Share = D / (r - g) = $2,16 / (0,10-0,04) = $36
Where:
D = the estimated value of next year's dividend
r = The required rate of return
g = the constant growth rate
To this case the value is: $2,16 / (0,10-0,04) = $36
Answer:
on average medicare tax is 1.45 % tax and social security is 6.25 % so simply multiply by those numbers their net income and go from there
Explanation: