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Crank
2 years ago
7

Each of two stocks, A and B, are expected to pay a dividend of $5 in the upcoming year. The expected growth rate of dividends is

10% for both stocks. You require a rate of return of 11% on stock A and a return of 20% on stock B. The intrinsic value of stock A
A. will be greater than the intrinsic value of stock B.
B. will be the same as the intrinsic value of stock B.
C. will be less than the intrinsic value of stock B.
D. cannot be calculated without knowing the market rate of return.
Business
1 answer:
salantis [7]2 years ago
3 0

Answer:

a

Explanation:

Intrinsic  value can be determined using the constant dividend growth model

according to the constant dividend growth model

price = d1 / (r - g)

d1 = next dividend to be paid

r = cost of equity

g = growth rate

Stock A = $5/ (0.11 - 0.1) = $500

Stock B = $5/ (0.2 - 0.1) = 50

Intrinsic value of A is greater than that of B

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The acquisition costs of property, plant, and equipment do not include: a. The ordinary and necessary costs to bring the asset t
Anna35 [415]

Answer:

Maintenance costs during the first 30 days of use

Explanation:

As we know that

The asset are classified into three types i.e current asset, fixed assets, and the intangible asset

The fixed asset is also known as a long term asset which includes the plant & machinery, land & building, furniture & fixtures, etc

In addition, the purchasing price or acquisition cost of the land, plant and equipment covers the required costs used to get the asset in the desired condition and place of use, the net invoice price plus the legal fees, the shipping fees, the installation and any related sales tax, but the maintenance and repair expenses are not included in the purchase price for first 30 days of use

The last option is incorrect it should be 30 days instead of 180 days

6 0
3 years ago
Jerzy wants to keep his overall costs down and to enter into the international marketplace slowly and carefully. He is consideri
Varvara68 [4.7K]

Answer: Exporting

Explanation: Export refers the process in which good produced in one country is purchased by some another country.

In the given case, Jerzey is using the method of counter trade for the purpose of exporting. In counter trade, the two firms exchange their product on the basis of their particular needs.

Thus, from the above we can conclude that the right answer is option D.

8 0
3 years ago
Sneed Corporation reported balances in the following accounts for the current year: Beginning Ending Income tax payable $ 54 $ 3
bogdanovich [222]

Answer:

$181

Explanation:

Given that,

Beginning:

Income tax payable = $54

Deferred tax liability = $75

Ending:

Income tax payable = $34

Deferred tax liability = $145

Tax expenses during the year = $231

Amount of tax paid during the year:

= Tax expenses during the year + (Beginning - ending tax payable) - (Ending - Beginning deferred tax liability)

= $231 + ($54 - $34) - ($145 - $75)

= $231 + $20 - $70

= $181

7 0
3 years ago
1) The Johnson Manufacturing Co. has an annual operating budget of $750,000. Each year it budgets for the following expenses: po
nevsk [136]

Answer:

See below

Explanation:

The percentage allocated to each socially responsible action

1. pollution control

Pollution control has been allocated is $37,000

As a percentage

= $37,000/$750,000 x 100

=0.0493333 x 100

=4.933%

2. Community project

community project has been allocated $22,500

As a percentage

= 22,500/750,000 x 100

=0.03 x 100

=3%

3. Employee fitness

The amount allocated to employee fitness is $7500

As a percentage

=$7500/$750,000 x 100

=0/01 x 100

=1%

4. The total amount spent is

=, $37,000 +$22,500 +$7,500.

=$67,000

7 0
2 years ago
If the complement of a probability p'(x) = 0.25, what is the probability
professor190 [17]

The answer is 0.75.

When taking the compliment, remember it is always of the form :

<u>1 - p'(x) or 1 - p(x)</u>

Hence,

  • 1 - 0.25
  • 0.75
3 0
1 year ago
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