Answer:
The maximum price that should be paid for one share of this stock today is $46.86
Explanation:
Using the dividend discount model, we can calculate the price/fair value of the stock today. The DDM bases the price of the stock on the present value of the expected future inflows from the stock in the form of dividends and terminal value. The discount rate used to discount the cash flows is the cost of equity or required rate of return on stock.
The price of this stock at time zero (t=0) will be,
Prcie = 2 / (1+0.08) + 2.5 / (1+0.08)^2 + 50 / (1+0.08)^2
Price = $46.86
Answer:
If Impala decides to buy from the external source , it would then save the fixed of $1,750
Decision: Impala should be buy from the external source
Explanation:
<em>To determine the appropriate course of action, we shall determine whether there would be a net savings in cash flow as a result of purchasing externally or not.</em>
The relevant cash flows figures include:
- Internal variable cost of production
- External purchase price
- Savings in internal; fixed cost as result of buying outside
Variable cost of internal production = 42,000 + 8,750 + 15,750 = 66,500
Increase in variable cost if purchased externally = 66500 - 66500 = 0
If Impala decides to buy from the external source , it would then save the fixed of $1,750
Decision: Impala should be buy from the external source
Answer:
The correct option is A,safeguarding shareholders' interests
Explanation:
Showing integrity and ethical behavior comes under a company portraying itself as a good corporate citizen in order to endear itself to stakeholders, however the responsibility of safeguarding shareholders' interests is the fundamental and not necessarily falls under ethical behavior as the primary reason for the creation of the business in the first place is to enhance maximization of shareholders' wealth
Disclosure and transparency as well as vigilance of the board of directors are both required in order to ensure the wealth of owners are enhanced.
Answer:
Gross Domestic Product"refers to the total value of all goods and services produced within a given period by a national economy domestic factors of production