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Effectus [21]
3 years ago
13

A firm receives a cash flow from an investment that will increase by 10 percent annually for an infinite number of years. This c

ash flow stream is called:
a. an annuity due.
b. a growing perpetuity.
c. an ordinary annuity.
d. a growing annuity.
Business
1 answer:
malfutka [58]3 years ago
5 0

Answer:

b. a growing perpetuity.

Explanation:

As we know that an annuity is a stream of the cash flow that goes for the limited time period i.e. number of years

But in the case of perpetuity it would go for an infinite time period

Since in the question the cash flow arises from an investment rises by 10% for an infinite number of years so this represents the growing perpetuity

Hence, the correct option is b.

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Based on the case and previous calculations, please answer the following short answer questions. Note: Your instructor will need
mezya [45]

Question Completion:

see Exhibit 4 attached.

Answer:

1. The largest and smallest divisions by net sales in 2017:

Largest divisions:

Fabric & Home care with 32%

Baby, Feminine & Family Care, 28%

Smallest divisions:

Beauty with 18%

Grooming, 11%

Healthcare, 11%

2. The one most important division in terms of the proportionate net earnings for the company is:

Fabric & Home Care

Explanation:

The two largest divisions generate 60% of the net sales of the company while the three smallest divisions generate only 40%.  In terms of the proportionate net earnings for the company, the two largest divisions also generate 53% of the net earnings of the company, while the three smallest divisions generate 47%.  The analysis shows that the company's financial sustenance is largely driven by the Fabric & Home Care division and the Baby, Feminine & Family Care division.  Another up-and-coming division is the Beauty division, which generates 18% of the net sales and 20% of the net earnings.

Download docx
4 0
2 years ago
Old Quartz Gold Mining Company is expected to pay a dividend of $8 in the coming year. Dividends are expected to decline at the
LenKa [72]

Answer:

$133.33

Explanation:

Calculation for The intrinsic value of the stock

Intrinsic value of the stock = 6% + [−0.25(14% − 6%)] = .04

Intrinsic value of the stock = 8/[.04 − (−.02)]

Intrinsic value of the stock = 8/.06

Intrinsic value of the stock = $133.33

Therefore the intrinsic value of the stock is $133.33

8 0
2 years ago
A report that shows the financial picture of a company at a given time and itemizes assets, liabilities, and stockholders' equit
Allisa [31]

Answer:

Balance sheet is the correct answer because it tells about the worth of company, its assets, shareholders funds (Equity) and amount borrowed by the company (Liability). Balance sheet is also known as Statement of Financial Position (SOFP)

All the other options tells about the earnings and costs of the company not about the assets and liabilities of the company.

6 0
2 years ago
Assume that Lucas's marginal tax rate is 32 percent and his tax rate on dividends is 16 percent. If a dividend-paying stock (wit
kipiarov [429]

Answer:

The correct answer to the problem is 7.728%

Explanation:

Lucas marginal tax rate = 32 percent

Tax rate on dividends = 16 percent

Dividend yield of a dividend-paying stock (with no growth potential) = 9.20 percent.

To determine the interest rate a municipal bond have to offer for Lucas to be indifferent between the two investments from a cash flow perspective =

Dividend yield multiplied by ( 1- tax rate on dividends)

= 9.20% × (1 - 16%)

= 0.092 × (1 - 0.16)

= 0.092 × 0.84

= 7.728%

3 0
3 years ago
When workers negotiate as a group with employers, they are engaging in ____.
Jlenok [28]

Collective Bargaining

3 0
3 years ago
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