Answer:
Explanation:
a.)
Dividend discount model(DDM) is used to determine the price of a stock.
The formula is as follows;
Price ;P0 = D1 /(r-g)
D1 = Dividend in year 1
r = capitalization rate or required rate of return
g = dividend growth rate
P0 = 8/( 0.10-0.05)
P0 = 160.
The price of the Fi corporation's stock is therefore $160.
b.)
Use the formula that shows the relationship between ROE , retention rate and growth rate. It's as follows;
g = ROE *b
g = growth rate
b = retention rate
Given Earnings per Share (EPS) = $12 and dividend = $8, find dividend payout ratio first.
retention ratio = (1 -dividend payout ratio)
dividend payout ratio = 8/12 = 0.667 or 66.7%
retention ratio ; b = (1 -0.667)
b = 0.333 or 33.3%
Plug it in the formula;
0.05 = ROE * 0.333
ROE = 0.05/0.333
ROE = 0.15 or 15%
c.)
This question is asking for the Present Value of Growth Opportunity (PVGO)
The formula is as follows;
PVGO = Price - EPS1 /r
Price = $160 (from part a)
Expected earnings per share (EPS) = $12
required rate of return(capitalization rate) ; r = 10% or 0.10 as a decimal
PVGO = 160 - 12/0.10
PVGO = 160 -120
PVGO = $40
Therefore, the market is paying $40 per share for growth opportunities.
Answer:
a. True
Explanation:
from the CAPM formula we can derive the statemeent as true.
risk free = 0.05
market rate = 0.12
premium market = (market rate - risk free) 0.07
beta(non diversifiable risk) = 0
Ke 0.05000
As the beta multiplies the difference between the market rate and risk-free rate a beta of zero will nulify the second part of the equation leaving only the risk-free rate. This means the portfolio is not expose to volatility
Here are the answers of the given questions above.
1. The correct answer would be option A. Input control. <span>A validation check used to determine if a quantity ordered field contains only numbers is an example of an input control.
2. The correct answer would be the option A. Batch control totals. Batch control totals </span><span>would assist in detecting an error when the data input clerk records a sales invoice as $12.99 when the actual amount is $122.99.
Hope these answers help.</span>
Answer:
His business will most likely be classified as C. Service business
Explanation:
Mondie Weller will be paid for residential landscaping services.The best classification will be a Service Business since the value the client gets varies from client to client as per their needs. Also there is no conversion of inputs into output so it will be incorrect to call it a Manufacturing Business.
Among all the choices, Brianna should take an internship
with a travel agency. Working in a hotel chain can be also an option, but it
may focus on the hospitality management, compared to obtaining an internship
with a travel agency wherein you can be exposed on dealing with the tourists.
You will be able to know how to arrange flights and accommodations and prepare
the itinerary as well. Overall, you will be trained to work as a travel agent whose
main role is to help people prepare and plan on their dream vacation.
