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3 years ago

What is financial objectives

Business

1 answer:

Mrac [35]3 years ago

5 0

Answer:

A financial objective is a specific goal or target of relating to the financial performance, resources and structure of a business.

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LA Diversified Inc. recently paid its annual dividend of $3. Dividends have consistently grown at a rate of 3.8%. The stock has

OleMash [197]

Answer:

The intrinsic value of the stock is $36.55 and option B is the correct answer.

Explanation:

Using the CAPM, we can calculate the required rate of return on the stock which is the minimum return required by the investors to invest in the stock.

r = rRF + Beta * (rM - rRF)

Where,

rRF is the risk free rate
rM is the return on market

r = 0.02 + 1.29 * (0.1 - 0.02) = 0.1232 or 12.32%

The stock's dividend growth is constant. Thus, the current price or intrinsic value of such a stock can be calculated using the constant growth model of the DDM. Th formula for price under the constant growth model is,

P0 = D1 / r-g

Where,

D1 is the dividend expected for the next period or D0 * (1+g)
r is the required rate of return
g is the growth rate in dividends

P0 = 3 * (1+0.038) / (0.1232 - 0.038)

P0 = $36.549 rounded off to $36.55

5 0

3 years ago

True or False?

alexdok [17]

The answer is True .

3 0

3 years ago

Read 2 more answers

Who Done It Mystery Theater sells tickets for dinner and a show for $ 40 each. The cost of providing dinner is $ 22 per ticket a

Readme [11.4K]

Answer:

$18

Explanation:

The contribution margin per patron is the ratio of the total contribution to the number of patrons. The total contribution is the difference between the total sales and the total variable cost.

Hence, the contribution per matron may also be derived as the difference between the sales per patron and the variable cost per patron.

The variable cost here is the cost of providing dinner per ticket as such,

Contribution margin per patron

= $40 - $22

= $18

6 0

4 years ago

Complete the sentences with the correct function of money. Norah walks into her favorite department store, Bullseye, to pick out

Illusion [34]

Answer: Unit of account

Store of value

Medium of exchange

Explanation: Money has three functions:

Unit of account

Store of value

Medium of exchange

Unit of Account- Money can be used as a measure in determining value of goods and services. Norah compared the price of the dress to determine the dress costs less.

Store of value- money retains it value over periods of time, therefore it can be used to store value. Norah is saving money in a piggy bank.

Medium of exchange - money is used to facilitate transactions: it can be used to exchange for goods and services. Norah exchanged money for a dress.

I hope my answer helps.

4 0

3 years ago

Big Box retailing has a market capitalization of $500 million and 20 million shares outstanding. In order to finance its growth,

Vilka [71]

Answer:

Price of stock after right issue = $22.81

Explanation:

given data

market capitalization = $500 million

share outstanding = 20 million

new share at a price = $1.00

to find out

What will the price of a share be after the SEO

solution

we get first current stock price that is express as

current stock price = $\frac{market\ capitalization}{share\ outstanding}$ .....................1

current stock price = $\frac{500}{20}$

current stock price = $25

and

every ten rights to purchase a new share at a price of $1.00

so number of right company can issue = $\frac{20}{10}$

number of right company can issue = 2 million

Total Fund raise through right issue = 2 million × $1

Total Fund raise through right issue = $2 million

and

Total value of market capitalization after right issue = $500 + $2

Total value of market capitalization after right issue = $502 million

and

Total number of share outstanding after right issue = 20 million + 2 million

Total number of share outstanding after right issue = 22 million

Price of stock after right issue will be = $\frac{502}{22}$

Price of stock after right issue = $22.81

8 0

3 years ago

What is financial objectives​

What is financial objectives