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Andrews [41]
2 years ago
11

Assume that an analyst is using the constant dividend growth model to value a stock. Which of the following scenarios would be c

ertain to cause her to decrease her estimate of the stock's value (assuming, of course, that all other factors are held constant)?
A. She believes the company has become riskier, and therefore increases her required rate of return for the stock.
B. She increases her estimate of the company’s next year’s dividend.
C. She increase her estimate of the expected annual rate of growth in the company’s dividends.
D. She decreases her required rate of return for the stock.
E. None of the above would cause her to decrease her estimate of the stock’s value.
Business
1 answer:
Sophie [7]2 years ago
7 0

Answer: A. She believes the company has become riskier, and therefore increases her required rate of return for the stock.

Explanation:

The formula for the Constant dividend growth model of valuing stock is:

<em>= Next dividend / (Required return - growth rate)</em>

From the formula above, one can tell that if the required return is higher, it would result in a lower value for stock because it would divide the numerator more.

If the analyst believes that the company is riskier and increases the required return, the value would therefore reduce if other measures are kept constant.

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irga5000 [103]
Let x be the number of children
Let y be the number of adults

Equation 1: x + y = 9
Equation 2: y = 9 - x

           210x + 315y = 2205
     210x + 315 (9-x) = 2205
210x + 2835 - 315x = 2205
            2835 - 2205 = 315x - 210x
                         630 = 105x
                  630/105 = 105x/105
                             6 = x

There are 6 numbers of children.

To get the y, use the Equation 2: y = 9 - 6 ---> y = 3
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6 0
3 years ago
Read the scenario below and then answer the question. Sample scenario: Scientists have created a new grass seed that stops grass
Ray Of Light [21]

Answer: a good with an elastic supply

Explanation:

Price elasticity of supply simply refers to how the changes in market price of a good bring about a responsiveness to the supply of such good.

Based on the information given, the best description of the grass seed that is described in this scenario is that it's a good that has an elastic supply. This is because the price of the good in thus case, is sensitive to the changes in the price.

7 0
3 years ago
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One of the reasons that services marketing has lagged behind product marketing is because marketing first developed to move prod
Naddik [55]

Answer:

i do not know

Explanation:

4 0
3 years ago
The following information is available for Montrose Company at December 31: Cash in bank account $ 8,540 Petty cash $ 250 Short-
ANEK [815]

Answer:

Cash $10,430 ; Cash equivalents $20,400

Explanation.

Cash consist of all currencies in hand or any convertible asset which can be converted to cash immediately.

It is to be noted that the assets with high liquidity will be included in cash and cash equivalent balance. They can quickly be converted to cash and would normally have 90 or lesser days to mature.

Solution.

$

Cash in bank. 8,540

Petty cash. 250

Check from customer. 1,350

Money order. 290

Cash. 10,430

The check has a very short maturity period since it will clear within 3-4 working days.

Money order can be cashed immediately .

Therefore;

Cash value is $10,430

For cash equivalent,

Cash equivalent = Money market fund balance + Treasury bills maturing in 60days

Cash equivalents = $10,400 + $10,000

=$20,400.

The amounts considered as cash and cash equivalents as of 31 December are ;

Cash $10,430 , $20,400 respectively.

8 0
3 years ago
Toni and beyonze are married and file jointly. during 2016, they paid tuition for their daughter's college in the amount of $23,
azamat
I think it's B

I hope it helped you!
5 0
3 years ago
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