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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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Sometimes food is produced in other countries that do not have the same level of chemical safety as in the US. This imported foo
Artemon [7]

Answer:

The correct answer is letter "A": affordable food creates an external benefit rather than an external cost in the case.

Explanation:

Externalities are costs third parties have to be responsible for even if they were not involved in causing the externality. There are positive externalities and negative externalities. <em>Positive externalities</em> are those that third parties benefit from. <em>Negative externalities</em> affect third parties.

Thus, importing less-expensive but chemically-dangerous food will create a positive externality to consumers purchasing those types of foods since less money is getting out of their pockets without them having to influence discounts.

4 0
3 years ago
A deposit of $100,000 is made to an investment account today. At the end of each of the next four years, $10,000 must be paid ou
andrey2020 [161]

Answer:

14.06%

Explanation:

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We can use IRR formula to find the interest rate.

year                            cashflow

0                                   -100000

1                                      10000

2                                     10000

3                                     10000

4                                     130000

IRR                                 14.06%

The calculation has been done on excel sheet

8 0
3 years ago
Sean works for Cash'n'Carry, a payday loan company. He has been asked to develop an ethical mission statement to reassure custom
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Answer:

c. Emphasis on ethics

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Sean has been tasked with developing a ethical mission statement with a view of reassuring customers on predatory lending practices.

This is a renewed emphasis on the ethics of the company and by so doing it will reassure the company is aware of the ethical practice in this regard and that they are pledging to act ethically.

Ethics is defined as the process of systemising and recommending concepts of right and wrong. It is also called moral philosophy.

4 0
3 years ago
A federal agency that engages primarily in commercial activities, produces revenues, and requires greater flexibility than most
jeka57 [31]

Answer:

government corporation

Explanation:

A government corporation is a government-owned firm that operates with the same integrity as a private company, except that the owner is government. Every government company is chartered by legislative act. Government corporations are typically created in markets where there is a natural monopoly, they are significant to the country's infrastructure, natural resources, and general public interest.

4 0
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