Answer:
P0 = $14.4683 rounded off to $14.47
Explanation:
To calculate the market price of the stock today, we will use the constant growth model of DDM. The constant growth model calculates the values of the stock today based on the present value of the expected future dividends from the stock. The formula for price today under this model is,
P0 = D0 * (1+g) / (r - g)
Where,
- D0 is the dividend today
- g is the constant growth rate
- r is the required rate of return on the stock
We first need to calculate r using the CAPM equation. The equation is,
r = rRF + Beta * (rM - rRF)
Where,
- rRF is the risk free rate
- rM is the return on market
r = 0.06 + 1.6 * (0.147 - 0.06)
r = 0.1992 or 19.92%
Using the price formula for DDM above, we can calculate the price today to be,
P0 = 1.9 * (1+0.06) / (0.1992 - 0.06)
P0 = $14.4683 rounded off to $14.47
Explanation:
A business proposal is a written document in which the offers and proposed plans given to the clients are listed. This proposal or report is got checked by the manager before sending to the client. Even if the simple report has to be presented to the manager, it must have some points that capture the attention of your manager. The proposal or report must cover every aspect which is being discussed.
- The writing of the proposal or report must be persuasive.
- It should be precise.
- The tone of the proposal must be professional.
- Important points should be marked bold or italic.
- Paragraphing should be used.
- Bullets, lists and Tables should be used where needed.
- The document should have a visual appeal.
All such things will make the document appealing and will capture the attention of your manager.
Brennan Manufacturing monitors the number of customer returns for each product model to attempt to track when the organization is producing a large number of defective products. This is an example of: Feedback control.
The opportunity cost of attending class is the $15 that could have been made by watching a neighbor's child.
Opportunity cost refers to the benefits that one gives up in order to enjoy another benefit, that is, the benefit that is sacrificed.
In this question, two benefits are given up, but the real opportunity cost is the one that have the highest value, which is the $15.
Answer:
The correct answer:
$14,000 (b.)
Explanation:
Depreciation is an accounting method of allocation of cost to a tangible asset, where the recorded cost of a fixed asset is reduced in a systemic manner, until the value of the asset becomes zero is negligible.
In the straight-line basis of calculating depreciation, the difference between the cost of an asset and its expected salvage value is divided by the number of years it is expected to be used.
Mathematically, it is calculated as:
Depreciation of an asset = (purchase price - salvage value) ÷ estimated useful life.
Purchase price = $160,000
salvage value = $20,000
useful life = 10 years
∴ Depreciation = (160,000 - 20,000) ÷ 10
= 140,000 ÷ 10 = $14,000.
This means that at the end of every year, the value of the equipment reduces by a price worth $14,000.
