Sin Qua Corporation is a company listed on the stock exchange and issued corporate bonds. which statement is most likely true?

Which of the following statements is FALSE? A. According to the constant dividend growth model, the value of the firm depends

Vedmedyk [2.9K]

<u>A. According to the constant dividend growth model, the value of the firm depends on the current dividend level, divided by the equity cost of capital plus the grow rate.</u>

This is the false statement.

<u>Explanation</u>:

The fair value of stock can be calculated using the dividend growth model. While calculating the value of the stock, the growth of the dividends should be considered either in a stable rate or at a different rate during the period at hand.

The dividend growth model is also known as a <u>valuation model</u> as it is used to achieve the value of the stock.

Equity cost is the cost that the firm owes to the equity investors to compensate the risk of their investment.

4 0

3 years ago

1

katen-ka-za [31]

Answer:

A

Explanation:

8 0

3 years ago

Wyatt Oil is contemplating issuing a 20-year bond with semiannual coupons, a coupon rate of 7%, and a face value of $1000. Wyatt

enyata [817]

Complete question:

Security Term (years) Yield (%)

Treasury 2 0 5.5%

AAA Corporate 2 0 7.0%

BBB Corporate 20 8.0%

B Corporate 2 0 9.6%

Wyatt Oil is contemplating issuing a 20-year bond with semiannual coupons, a coupon rate of 7%, and a face value of $1000. Wyatt Oil believes it can get a BBB rating from Standard and Poor's for this bond issue. If Wyatt Oil is successful in getting a BBB rating, then the issue price for these bonds would be closest to:

A) $891 B) $901 C) $1,000 D) $800

Answer:

If Wyatt Oil is successful in getting a BBB rating, then the issue price for these bonds would be closest to: $901

Solution:

Given,

FV = 1000,

N = 40,

I = 4,

PMT = 35

Compute PV ,

PV = $FV \frac{1}{( 1+r)^{n} }$

PV = 901.04

If Wyatt Oil is successful in getting a BBB rating, then the issue price for these bonds would be closest to: $901

5 0

3 years ago

It might be a good idea to expand or upgrade a firm's human capital base during a ______, because unemployment is high and there

butalik [34]

It might be a good idea to expand or upgrade a firm's human capital base during a downturn, because unemployment is high and therefore human capital is abundant and wages usually fall.

Social scientists refer to personal qualities seen to be helpful in the manufacturing process as "human capital." It includes the education, health, and knowledge of the workforce.

The information, skills, and health that people invest in and amass throughout the course of their life give them the opportunity to realize their potential as contributing members of society.

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3 0

2 years ago

Ruby Company produces a chair that requires 5 yards of material per unit. The standard price of one yard of material is $9.10. D

Marrrta [24]

The price variance for Ruby company is at an unfavorable position that is $19,415, the quantity variance stands at $6,370 (favorable condition) and the cost variance has unfavorable balance that is equal to $13,045.

<h3>What is a variance?</h3>

A variance in accounting is the distinction between a forecasted quantity and the real quantity. Variances are common in budgeting, however, you may have a variance in something which you forecast.

As per the information, we have to calculate:

a) Price variance: (Standard Price - Actual price) * Actual Quantity

Price variance: ($9.10 - $9.65) * 35,300

Price variance: $0.55 * 35,300

Price variance: $19,415 Unfavorable.

b) Quantity variance = (Standard Quantity - Actual Quantity) * Standard Price

Quantity variance = (7,200 * 5 - 35,300) * $9.10

Quantity variance = (36,000 - 35,300) * $9.10

Quantity variance = $6,370 Favorable.

C) Cost variance = $19,415 Unfavorable + $6,370 Favorable

Cost variance = $13,045 U

Hence, The price variance for Ruby company is at an unfavorable position that is $19,415, the quantity variance stands at $6,370 (favorable condition) and the cost variance has an unfavorable balance that is equal to $13,045.

learn more about variance:

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5 0

2 years ago