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Artemon [7]
3 years ago
12

Todd Mountain Development Corporation is expected to pay a dividend of $3 in the upcoming year. Dividends are expected to grow a

t the rate of 11% per year. The risk-free rate of return is 8%, and the expected return on the market portfolio is 18%. The stock of Todd Mountain Development Corporation has a beta of 0.80. Using the constant-growth DDM, the intrinsic value of the stock is _________. Multiple Choice 8.80 11.11 27.27 60.00
Business
1 answer:
PilotLPTM [1.2K]3 years ago
7 0

Answer:

the intrinsic value of the stock is $60

Explanation:

The computation of the intrinsic value of the stock is as follows:

But before that the cost of equity is

The Cost of Equity is

= Risk Free Rate + Beta × (Market Return - Risk Free Rate)

= 8% + 0.80 × (18% - 8%)

= 16%

Now

Intrinsic Value is

= Next year Dividend  ÷ (Rate of Return - Growth rate)

= $3 ÷ (16% - 11%)

= $60

hence, the intrinsic value of the stock is $60

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Statement/questions that serves as illustration as regards communication with candor is : B: I’m finding it hard to get our work done with all of these stacks of paper on the table.”

  • Whenever a candor is been exerted when one is engaging in a communication, then doing this will encourage other people to exert candor too.

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Therefore, option B is correct.

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7 0
3 years ago
If the state of Washington's government collects $75 billion in tax revenues and total spending in the same year is $74.8 billio
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Answer:

b. budget surplus. 

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A budget surplus is when income from taxes exceeds government spending .

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I hope my answer helps you.

7 0
3 years ago
Please help me out using these notes
Yanka [14]

Problem One

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2: True too. There is only limited liability

3: False: LLCs are not a separate Tax Entity

4: True. It's not in your notes, but members are not held responsible for the criminal acts of an LLC

5: True Members are taxed on their own tax returns.

1 2 4 and 5 are all true. Only 3 is false.

Problem Two

Inflation shows up very slowly and then takes hold with a vengeance. I would say we are currently in an inflation spiral but it is just starting. Just ask your mum about food prices (or your dad about overall cost of living).

The first thing the government must do is take action when they see something happening. They can do one of two things: the can cut expenditures or raise taxes. They can do the former anytime, the latter will take time to happen.

I think the second step is to gear down manufacturing beginning in January.

Producers know that they should manufacture less because consumers will have less money, but when to start doing that is the question. March or April is when the Tax Payer notices the tax increase.

Inflation will decrease is the last step. But this is an iffy question. The second and third steps could be interchanged. The way I have written it is the way I would have answered it, but I can't be certain.


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Explanation:

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