Answer:
11.14%
Explanation:
Blume's formula is used to combine both arithmetic and geometric returns. This is because using arithmetic growth rate exclusively would be overly optimistic for longer time horizons and on the other hand, using geometric growth rates exclusively would be overly pessimistic for short time horizons.
Using the attached formula, plug in the given numbers;
R(T) would be the sale growth rate we need to calculate.
R(T) = 
R(T) =0.0257 + 0.0857
R(T) = 0.1114 as a decimal
Therefore, the forecast sales growth would be 11.14%
Complete question:
Perch Co. acquired 80% of the common stock of Float Corp. for $1,600,000. The fair value of Float's net assets was $1,850,000, and the book value was $1,500,000. The non-controlling interest shares of Float Corp. are not actively traded. What amount of goodwill should be attributed to the non-controlling interest at the date of acquisition?
a. 150,000
b. 250,000
c. 0
d. 120,000
e. 170,000
Answer:
150,000
of goodwill should be attributed to the non-controlling interest at the date of acquisition
Solution:
A non-controlling interest (NCI) is a role in which a owner holds less than 50% of remaining and has little control over decisions. A minority ownership is often known as the minority interest. Non-controlling interests are calculated by their net worth and are not eligible for future right to vote.
Now , Calculate the amount
Cost(PP) - 1,600/0.8 = 2,000
FV - 1,850
GW = 1,850 - 2,000
= 150,000
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Answer:
My HPR was 11%
Explanation:
Investment Value at Beginning of the yer = $50
Growth rate = 4%
Holding period Return = Dividend + return on investment value
Holding period Return = $3.50 + ( $50 x 4% )
Holding period Return = $3.50 + $2
Holding period Return = $5.50
Holding Period Return Rate = ( $5.5 / $50 ) x 100
Holding Period Return Rate = 11%
So, my HPR was 11%
