Answer:
The ratio that is helpful in understanding whether the relationship between cash and marketable securities is reasonable in relation to current assets or total assets is;
Current assets/Total assets
Explanation:
Current assets represent a portion of the total assets that can be converted into cash or marketable securities quickly. A higher Current assets to total assets helps one to know the amount of the total assets that can be liquidated fairly quickly. The current assets should be able to be converted into cash or cash equivalents within a year to be deemed as a current asset. Examples of current assets are; cash, cash equivalents, stock inventories, market securities, accounts receivable, inventories and other liquid assets.
Current assets are the exact opposite of long-term assets, since the latter represents the portion of total assets that can not be easily converted in cash and cash equivalents within a year. They usually take a much longer time to convert into cash. They are; equipment, land and buildings.
The total assets include all the assets mentioned above. The summation of currents assets and long-term assets form the total assets.
Answer:
The intrinsic value of the stock is $36.55 and option B is the correct answer.
Explanation:
Using the CAPM, we can calculate the required rate of return on the stock which is the minimum return required by the investors to invest in the stock.
r = rRF + Beta * (rM - rRF)
Where,
- rRF is the risk free rate
- rM is the return on market
r = 0.02 + 1.29 * (0.1 - 0.02) = 0.1232 or 12.32%
The stock's dividend growth is constant. Thus, the current price or intrinsic value of such a stock can be calculated using the constant growth model of the DDM. Th formula for price under the constant growth model is,
P0 = D1 / r-g
Where,
- D1 is the dividend expected for the next period or D0 * (1+g)
- r is the required rate of return
- g is the growth rate in dividends
P0 = 3 * (1+0.038) / (0.1232 - 0.038)
P0 = $36.549 rounded off to $36.55
Answer:
exports of their country
Explanation:
From the question we are informed about Thomas who Is a financial advisor to a committee seeking to revive the value of the national currency, which has grown weak. He has to suggest a
point on which the nation should focus in order to strengthen Its currency. In this case the trade element should Thomas suggest as a focus is that
the nation focus on exports of their country. Whenever a country increases her export, there will be rise in demand for local currency and this will strengthen the local currency power.
The statement above is FALSE. The cash pay back techniques is an important accounting too which managers used to evaluate the viability of capital projects before they decide to go for such projects. The method is used to evaluate how long a capital project will take to cover its original investment.
$1.101 trillion that was the budget deficit
