Answer:
$13.89
Explanation:
The computation of the value of stock is shown below:
Year Dividend Present value factor at 16% Present value
1 $1.90 0.862 $1.64
2 $2.10 0.743 $1.56
3 $2.30
Price $14.375 0.743 $10.68
The price is computed below:
= $2.30 ÷ 16% = $14.375
Total present value $13.89
The present value factor is computed below:
= 1 ÷ (1 + rate) ^ years
For Year 1 = 1 ÷ 1.16^1 = 0.862
For Year 2 = 1 ÷ 1.16^2 = 0.743
It is challenging to calculate the company's cost of equity due to its private ownership. Therefore, it seems sense that you would wish to assess the cost of capital for SMI using the pure play approach. Tesla has been picked as the representative business.
To ensure as much resemblance when determining the riskiness of the project, the pure play strategy simply advises that we select a public firm that is 'purely' engaged in the type of work or projects we are going to carry out.
Tesla appears to have been chosen as a representative by SMI because it is a vehicle manufacturer and works in battery development.
Improvements
1) Decide on an appropriate pure play business. in and of itself, challenging. By then looking for pure play companies that manage those kinds of projects, they may identify distinct projects in their portfolio and discover appropriate betas for each of their different initiatives.
2) The analysis of options and futures on the shares of the publicly traded company that is utilized for pure play can be used to determine forward-looking betas. This will resolve the problem with betas that look ahead.
To learn more about Tesla here
brainly.com/question/23838761
#SPJ4
Inflation is an increase in prices so the answer would be more
Answer:
The correct answer is B
Explanation:
Principle is the term which is defined as the scientific law or theorem which has various special applications.
And sometimes matters of duties, principles or rights could countermand or override the consequences when weighing and comparing the alternatives related to the ethical decisions making.
For example, how an employee weighs and compares the alternatives for the ethical decision making might ground or depend on the duties or responsibilities linked with the position of the employee in the company.
