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Rzqust [24]
3 years ago
9

If a company's free cash flows are expected to grow at a constant rate of 5% a year, which of the following statements is CORREC

T? The stock is in equilibrium. a. The company's WACC must be equal to or less than 5%. b. The company's stock's dividend yield is 5%. c. The expected return on the company's stock is 5% a year. d. The value of operations is expected to decline in the future. e. The company's value of operations one year from now is expected to be 5% above the current price.
Business
1 answer:
Oliga [24]3 years ago
5 0

Answer:

The correct option is e. The company's value of operations one year from now is expected to be 5% above the current price.

Explanation:

Free cash flow (FCF) refers to the cash that a company generates after taking into consideration cash outflows needed to support operations and maintain the capital assets of the company.

When the free cash flow of a company is expected to grow at a certain constant rate, the implication is that the the value of operations of that company one year from the current period is expected to be higher than the current price.

Based on the explanation above, the correct option is e. The company's value of operations one year from now is expected to be 5% above the current price.

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Suppose we have a bond issue currently outstanding that has 20 years left to maturity. The coupon rate is 8% And coupons are pai
cluponka [151]

Answer:

c. 10%

Explanation:

The Yield to Maturity(YTM) of the Bond is the cost of the debt. So, we need to find the YTM first.

Here i will use a Financial Calculator to enter and compute the YTM as follows :

N = 20× 2 = 40

PMT = ($1,000 × 8%) ÷ 2 = $40

PV = $828

P/YR = 2

FV = 1,000

I or YTM = ?

Thus the cost of the Bond is 10%

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3 years ago
The existence of a ________ means that the interest rate on a two-year bond will exceed the average interest rate on two success
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2 years ago
What is the most efficient way to adjust the size of the picture?​
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Answer:

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3 years ago
Which of the following transactions are examples of prepayments that will require an adjustment at the end of the accounting per
iren [92.7K]

Answer:

Which of the following transactions are examples of prepayments that will require an adjustment at the end of the accounting period on December 31? (Select all that apply.)

B. A company pays a 6-month insurance premium at the beginning of October.

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Explanation:

B. A company pays a 6-month insurance premium at the beginning of October.

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If a company buys back $100 worth of stock, this increases the cash flow to the stockholders by ___.
andreyandreev [35.5K]

If a company buys back $100 worth of stock, this increases the cash flow to the stockholders by exactly $100.

This is further explained below.

<h3>What are stockholders ?</h3>

Generally, An person or a legal organization that is registered by a company as the legal owner of shares of the share capital of a public or private business is referred to as a shareholder of that corporation.\

In conclusion, When a corporation repurchases $100 worth of its own stock, the result is an increase in cash flow of precisely $100 to the firm's investors.

Read more about stockholders

brainly.com/question/18523103

#SPJ1

7 0
1 year ago
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