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Vikentia [17]
3 years ago
7

The present value, today, of the terminal (perpetuity) value equity cash flow that begins in 7 years is $6,700,000 assuming a co

st of equity equal to 8%. The year 7 free cash flow (beginning of the growing perpetuity) is $550,000. What is the growth rate required for the continuation value (terminal value perpetuity) term?
Business
1 answer:
nignag [31]3 years ago
8 0

Answer:

2.83%

Explanation:

P0 = $6,700,000

Cost of equity Ke = 8%

So, value of this perpetuity 6 years form now is  P6 = P0*(1+Ke)^6

= $6,700,000*(1.08)^6

= $6,700,000*1.58687432294

= $10632057.96

Free cash flow at year 7 (FCF7) = $550,000

So, using constant growth model, g = Ke - FCF7 / P6

g = 0.08 - 550000/10632057.96

g = 0.08 - 0.05173034

g = 0.02826966

g = 2.83%

Thus, the growth rate required for the continuation value (terminal value perpetuity) term is 2.83%.

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The “Beijing Consensus” approach to economic development, a model based on China’s rapid economic growth, implies a. experimenti
maksim [4K]

Answer:

a. experimenting with policies that are compatible with a state’s political structure and experience rather than with economic liberalism.

Explanation:

The Beijing Consensus reflects a new approach to development based on China's model of economic growth. It is a non-liberal, state-driven view of development, in which development is seen as a process of structural transformation of society and cannot be confused or replaced by market economic policies. Thus, the central objective of the Beijing Consensus Chinese Development Policies is to create a development policy based on the experience of the state, within that country's political conformation, in order to link economic development to social and human development.

6 0
3 years ago
If the abnormal return for a stock during the first week is +5 percent and +3 percent during the second week, what is the abnorm
saul85 [17]

Answer:

C) 8.15 percent

Explanation:

The computation of the abnormal return for the two week period is as follows:

Abnormal return is

= (1 + first week abnormal return) × (1 + second week abnormal return) - 1

= (1 + 5%) × (1 + 3%) - 1

= 1.0815% - 1

= 8.15%

Hence, the correct option is c.

We simply applied the above formula so that the correct value could come

And, the same is to be considered

8 0
3 years ago
An llc is formed when a general partnership files a statement of qualification with the appropriate state official. true or Fals
vova2212 [387]

Answer:

True

Explanation:

A LLC, or Limited Liability Company is a company that providesliability protection to those that form it, and is formed when a group of persons file articles of organization which are also known as certificate of corporation, and they have to file those documents in the secretary of state´s corporation bureau.

4 0
3 years ago
Read 2 more answers
Societies make choices about goods and services based on the availability of A. land B. workers C. resources D. new technology P
kati45 [8]

Answer:

c

Explanation:

Resources are means or factors used to produce goods and services that satisfy human wants.

Human wants and that of the society is unlimited but the resources available to satisfy these wants are limited. As a result, economic agents must make decisions based on the availability of resources.

Resources include :

Land are natural resources used to produce goods and services e.g. gold mine

Labor is the effort used by people in  the production of goods and services.

Capital includes machinery and man made resources used in production e.g. hammer

An entrepreneur is a person who combines the other factors of production together

8 0
3 years ago
Flatter organizational structures rely on lower-level employees to participate in decision making. These employees are generally
NemiM [27]

Answer: Team leader

Explanation:

A flatter organizational structure is a firm's organizational structure which is tall, mid-sized or flat and is used by many small companies due to lack of manpower.

For example, a new consulting firm will employee senior management employees in finance,marketing, and sales and these executives will act as team leaders.

A team leader is someone who gives instructions, guidance, leadership an direction to a group of individuals to achieving a goal. The team leader the reports his or her results to the manager.

6 0
3 years ago
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