Answer:
The value of this stock today should be $6.22
Explanation:
The company will start paying dividends 2 years from today that is at t=2. The dividends received 2 years from today can be denoted as D2. The constant growth model of DDM will be used to calculate the price of this stock at t=2 as the growth rate in dividends is constant forever.
The price at t=2 will then be discounted back to its present value today to calculate the price of this stock today.
The price of this stock at t=2 will be,
P2 = D2 * (1+g) / (r - g)
P2 = 0.6 * (1+0.04) / (0.12 - 0.04)
P2 = $7.8
The value of this stock today should be,
P0 = 7.8 / (1+0.12)^2
P0 = $6.218 ROUNDED OFF TO $6.22
Answer:
On average the firm issued shares at $15 dollars each
Explanation:
the treasury stock are purchased at the market price which is not the same as the issuance price thus, we ignore it.
the company issued 33,600 shares with par value of $10
from which it has $168,000 additional paid-in
In total: 33,600 x $10 = 336,000
<u> + 168,000 </u>
Total paid-in 504,000
504,000 / 33,600 = <em>$15</em>
Answer:
In accounting, agency costs are the costs of hiring an agent in order for him/her to act on behalf of a principal. In finance, agency costs are much broader since they imply costs that may appear due to conflicts of interests between the agent and the principal. E.g. a manager who seeks to accomplish short term goals in order to collect a bonus but hurts the long term objectives and goals of the stockholders.
Agency costs of financial distress refers to the costs associated with conflicts of interest that may result in a company being insolvent, specially in the long run. This type of costs are not necessarily related to operating costs, instead they result from management decisions and strategies, e.g. higher cost of capital or debt, or even excessive spending.
Agency benefits of leverage result from stockholders benefiting from the agent's decision to keep equity low, and if needed, obtain financing from debt sources.
I guess the correct answer is deviant workplace behavior.
Jonathan Cowan is upset because he was passed over for a promotion he had really worked hard for. In response to his anger toward the manager and the company, he has started gossiping about the manager with his colleagues and assigning blame on him unnecessarily. Jonathan's behavior is an example of deviant workplace behavior.
Answer:
Local incentive
Explanation:
Local incentives can be described as economic development incentives like cash and near cash assistance that are provided by the government of a country or state in order to retain current businesses and also to attract new businesses.
These incentives are usually in for of tax breaks, training of workers, infrastructural development, etc.
In the question, Georgia state spending of $24 million to purchase the property and an additional $36 million to prepare the site specifically for DaimlerChrysler are examples of local incentive offered to DaimlerChrysler.
Therefore, the correct answer to fill in the gap is local incentive, we have:
The <u>Local incentive</u> offered was not enough to convince DaimlerChrysler that the Georgia site was a good location for its factory.
