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Artemon [7]
2 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]2 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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Maslowich

Answer:

A) the lessee records an asset and a liability for the present value of lease payments.

Explanation:

In a finance lease, the lessee business must estimate the present value of its obligations under the lease contract (using the lease's interest rate as the discount rate) and record it in the balance sheet as:

  • a debit entry under the fixed asset account
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7 0
3 years ago
Mark owns his own business and wants to make sure that his employees arrive on time each day and take breaks as specified. He ha
olga2289 [7]

Operant conditioning is used by Mark .

<h3><u>Explanation:</u></h3>

The instrumental conditioning is the other name given for operant conditioning. It can be considered as a method of learning in which  rewards and punishments are used for modification of certain behaviors. This forms a relativity between certain behavior and the consequences of that behavior.

In the example given, Mark has decided to give rewards in order to make his employees to reach office at time. Monthly rewards are given to those employees who did not take breaks and thus he is using the principle of Operant conditioning .

6 0
3 years ago
You are asked to complete a short survey after attending a free comedy show on campus. If the first question asked you to give a
klio [65]

Answer: A Semantic Differential Scale question.

A rating scale question is a type of a closed-end question in which the person who takes the survey assess the question on a given scale.  

A rating scale may be a Likert scale or a Semantic differential scale.

In a Likert scale the choices usually range between strongly agree and strongly disagree.  

In a semantic differential scale, however, each end of the scale has opposing sentences. In the question above, the five-point scale ranges from “hilarious” to “not funny”. Since this scale has opposing sentences at each end, this question is a semantic differential scale question.


6 0
3 years ago
In December 2016, Infodeo established its predetermined overhead rate for movies produced during 2017 by using the following cos
max2010maxim [7]

Answer:

$3.6

Explanation:

The computation of the predetermined overhead rate is shown below:

Predetermined overhead rate = (Total estimated manufacturing overhead) ÷ (estimated direct labor costs)

= $1,584,000 ÷ $440,000

= $3.6

It shows a relationship between the estimated manufacturing overhead cost and the estimated direct labor cost so that the correct overhead rate can be computed

8 0
3 years ago
In addition to understanding the laws affecting business in countries where their companies operate, it is most important for ma
Anna007 [38]

Answer:

D. Degree of law enforcement

Explanation:

In countries where a company operate, mostly for those operating in a foreign country, it is sacrosanct for the manager to know the laws that will affect their businesses and also the degree of law enforcement for those laws. This is important because there's a lot of variations in business laws and their degree of enforcement amongst various countries and also, rules and regulations concerning business changes from time to time. Hence, emphasis should be place by the manager on understanding the laws and the degree of the laws enforcement.

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3 years ago
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