Answer:
The stock price would be higher by $7.37
Explanation:
Free cash flow to equity = 195 million with a growth rate of 2% in perpetuity
Value of equity = Free cash flow to equity ÷ (Ce -g) = 195 million ÷ (13% - 2%)
= 190 ÷ 0.11 = $1,772,727,272.73 = $1,773 million
If growth rate is 3%, value of equity = 195 ÷ (13%-3%) = 195 ÷ 0.1 = $1,950 million
a. Value of stock = (1,773 + 15) million ÷ 22 = $81.27
b. Value of stock with 3% = 1,950 ÷ 22 = $88.64
Thus stock price would be higher by = b-a = $7.37
The five C's of credit<span> is a system used by lenders to gauge the creditworthiness of potential borrowers. The system weighs five characteristics of the borrower and conditions of the loan, attempting to estimate the chance of default. The five </span>C's of credit<span> are character, capacity, capital, collateral and conditions.
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Answer:
a person's regular occupation, profession, or trade.
Explanation:
Answer:
Option E, PURE DISCOUNT.
Explanation:
There are different types of loan, some are; principal only loan, interest only loan, amortized loan, compound loan, pure discount loan...
A pure discount loan is a loan in which the borrower receives money today and repays a single lump at some time in future. It is the simplest form of loan.
Practically, it means the borrower will not pay any interest over the years; instead the interest is earned when the loan is paid back at maturity.
For example, imagine you wanted to borrow $20,000 and pay back twelve months later. The interest and charges came to $2,000, you would receive $18,000 from the lender. But, you would still have to pay back the whole $20,000.
Therefore, since Cindy will be paying a lump sum equal to the cash amount she received today, it means that the lender already calculated the interest and other related charges and then discounted it from the face amount thereby making it equal at the point of repayment. The option that best suits the question is E, the type of loan PURE DISCOUNT.
Answer:
Forecasted Dividend Pay-out Ratio = 47.37%
Explanation:
Capital Budget = $625,000
Net Income = $475,000
Equity Ratio = 40%
Dividend to be paid = Net Income – Equity Ratio*Capital budget
Dividend to be paid =475000 – 40%*675000 = $225,000
therefore, we have that the fortecast dividend pay-out ratio will be given by:
Forecasted Dividend Pay-out Ratio = Dividend to be paid/Net Income
Forecasted Dividend Pay-out Ratio = 225000/475000
Forecasted Dividend Pay-out Ratio = 47.368% or 47.37%
