None of the aforementioned. The stock should be priced at 409.85 euros on the market. The right response is d.
To calculate the market price of the stocks, we need to determine the present value of all future benefits (dividends) that the shareholder will receive. Here's how we can calculate it:
For the first two years (t=1,2), the benefits per share are 40€ and 50€ respectively. Since the payout ratio is 55%, the dividends per share would be 22€ and 27.5€ respectively (55% of 40€ and 50€). To calculate the present value of these dividends, we can use the formula:
[tex]PV = D / (1 + r)^t[/tex]
where PV is the present value, D is the dividend, r is the cost of capital, and t is the time period (in years).
So, the present value of the dividends for the first two years would be:
[tex]PV1 = 22 / (1 + 0.09)^1 = 20.18 euros[/tex]
[tex]PV2 = 27.5 / (1 + 0.09)^2 = 22.17 euros[/tex]
After the second year, the benefits are expected to grow at a constant rate of 2%. Since the payout ratio is also expected to remain constant, the dividends per share would also grow at the same rate. To calculate the present value of the perpetuity, we can use the formula:
PV = D / (r - g)
where PV is the present value, D is the dividend, r is the cost of capital, and g is the growth rate.
So, the present value of the perpetuity would be:
[tex]PV3 = (27.5 * 1.02) / (0.09 - 0.02) = 367.50 euros[/tex]
Finally, we can calculate the market price of the stock by summing up the present values of all the dividends:
Market Price = PV1 + PV2 + PV3 = 20.18 + 22.17 + 367.50 = 409.85€
Therefore, the correct answer is d) None of the above. The market price of the stock should be 409.85€.
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though there are no statistics in the table, what do you expect was the finding based on the marginal means?
Based on the information provided and without the actual table or statistics, Marginal means refer to the average value of a variable while controlling for the other variables in a study.
1. Identify the variables in the study and their marginal means.
2. Compare the marginal means of each variable.
3. Analyze any differences or trends observed in the marginal means.
4. Draw conclusions based on the observed differences or trends, considering the context of the study.
By following these steps, you can interpret the findings of a study based on the marginal means of the variables involved. It's important to note that these expectations are hypothetical and speculative, as actual findings would require proper statistical analysis using appropriate methods, including significance testing, consideration of sample size, variability, and other relevant factors.
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What is the advantage of using common sized financial statements over those denominated in the currency of the country in which the corporation is incorporated?
A. The analyst no longer has to know anything about the foreign exchange rate of one company to another.
B. Common sized statements are easier to compare with other like companies.
C. None of the above.
D. Common sized statements do not consider accrual accounting principles.
E. Common size statements are required by GAAP, but not IFRS. Common size statements are required by GAAP, but not IFRS.
The advantage of using common-sized financial statements over those denominated in the currency of the country in which the corporation is incorporated is B. common-sized statements are easier to compare with other like companies.
Common-sized financial statements express each line item as a percentage of a key financial figure, such as revenue or total assets, which makes it simple to analyze and compare the financial performance and structure of different companies, regardless of their size or the currency they operate in. This standardized format allows analysts to quickly identify trends, evaluate efficiency, and compare a company's performance against industry benchmarks or competitors, without needing to know the foreign exchange rate.
However, it is important to note that common-sized statements do not replace the need for a thorough understanding of a company's financial health and the underlying factors that influence its performance. The advantage of using common-sized financial statements over those denominated in the currency of the country in which the corporation is incorporated is B. common-sized statements are easier to compare with other like companies.
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an administered vertical marketing system is best represented by which of the following programs? group of answer choices everett clinic, which operates more than 25 clinic sites beyond its main location in everett, washington teladoc, a web-based provider of physician consults the urgent care center at o'hare, which is run by the university of illinois health system the hospital for special surgery in new york, which operates facilities in florida and on long island
This example demonstrates a healthcare organization overseeing and coordinating various facilities under one centralized administration, fitting the concept of an administered vertical marketing system.
An administered vertical marketing system is best represented by the hospital for special surgery in New York, which operates facilities in Florida and on Long Island. This is because an administered vertical marketing system involves a single entity (in this case, the hospital for special surgery) that owns multiple levels of the distribution chain, such as manufacturing, distribution, and retailing.
In this case, the hospital for special surgery owns and operates facilities in multiple locations, making it an example of an administered vertical marketing system. The Everett Clinic, Teladoc, and the urgent care center at O'Hare are not examples of administered vertical marketing systems.
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schrank company is trying to decide how many units of merchandise to order each month. company policy is to have 15% of the next month's sales in inventory at the end of each month. projected sales for august, september, and october are 46,000 units, 36,000 units, and 56,000 units, respectively. how many units must be purchased in september?
In order to determine how many units must be purchased in September, the Schrank company must first calculate the required amount of inventory they must have on hand at the end of August.
This is done by taking 15% of the projected sales for September, or 54,000 units. This means that the company must have 8,100 units in inventory at the end of August (54,000 x 0.15). Therefore, the company must purchase at least 8,100 units in September in order to meet their desired inventory level.
This number will be adjusted if the actual sales for August exceed the projected sales amount. Additionally, the company must take into account any additional inventory needed to cover any unanticipated demand during the month of September.
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plaza sunset purchased a new building for $910,000 on october 31, 2021. annual depreciation on the building is $36,000. calculate the net book value of the building that will appear on the december 31, 2022 balance sheet.
The net book value of the building on the December 31, 2022 balance sheet will be $868,000.
How to calculate the net book valuePlaza Sunset purchased a new building for $910,000 on October 31, 2021. The annual depreciation for the building is $36,000.
To calculate the net book value of the building that will appear on the December 31, 2022 balance sheet, we need to consider the depreciation for both 2021 and 2022. In 2021, there are 2 months (November and December) in which depreciation occurs.
The monthly depreciation is $36,000 / 12 months = $3,000 per month. Therefore, the depreciation in 2021 is $3,000 * 2 months = $6,000. In 2022, the entire annual depreciation of $36,000 applies.
The total depreciation from October 31, 2021 to December 31, 2022 is $6,000 (2021) + $36,000 (2022) = $42,000.
To find the net book value on December 31, 2022, we subtract the total depreciation from the purchase price:
$910,000 - $42,000 = $868,000.
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which non-customers typically are aware of your product, but don't use it because either it's unacceptable, or they can't afford it?
The second-tier customers are aware of your product, but don't use it because either it's unacceptable, or they can't afford it
A set of potential consumers who are second tier customers are those who are aware of the product but do not utilise it either because they find it unsatisfactory or they cannot afford it. These clients could be somewhat interested in the goods, but they are unable or unwilling to purchase it at current price or under the present circumstances.
Due to this, businesses might need to modify their pricing and marketing plans in order to appeal to this segment of potential clients. This could entail making the product better to make it more desirable or cheaper to make it more accessible. Companies could also need to resolve issues and think about other marketing platforms or messaging. Businesses may grow revenues and their client base by focusing on second tier customers.
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so long as the coefficient of correlation between two stocks is less than 1, some reduction in risk can be obtained by combining the securities, true or false?
True, as long as the coefficient of correlation between two stocks is less than 1, some reduction in risk can be obtained by combining the securities.
The coefficient of correlation measures the degree to which two variables, in this case, the returns of two stocks, move together. It ranges from -1 to 1. A coefficient of 1 indicates a perfect positive correlation, meaning that the returns of both stocks move in the same direction all the time.
Conversely, a coefficient of -1 indicates a perfect negative correlation, meaning the returns move in opposite directions. A coefficient of 0 suggests no correlation between the returns of the stocks.
By diversifying a portfolio and combining two stocks with a coefficient of correlation less than 1, an investor can reduce their risk exposure. The reason for this is that when one stock performs poorly, the other stock might perform well, or at least not as poorly, thereby offsetting the overall negative effect.
This diversification helps to lower the overall risk in the portfolio as the fluctuations in the returns of the individual stocks will be partially offset by each other, thereby providing a smoother return profile for the investor.
In summary, combining two stocks with a coefficient of correlation less than 1 allows for a reduction in risk due to the diversification benefits, which help to smooth out the overall return profile of the combined securities.
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for firms that are selling a product that serves universal needs, and that do not face significant competition, a(n) strategy makes sense.
Answer: For firms that are selling a product that serves universal needs and that do not face significant competition, a monopoly strategy makes sense. This allows the firm to control the market and set prices as they please without having to worry about competition driving down prices. However, it is important to note that this strategy may not be sustainable in the long run as it may lead to government intervention and regulation to prevent abuse of market power. Additionally, the emergence of new technologies or substitutes may threaten the firm's monopoly position in the future.
Explanation: When a firm is selling a product that serves universal needs and has no significant competition, it can gain a monopoly position in the market. This allows the firm to set high prices and enjoy high profits, as consumers have no other options but to buy from the firm. Such a strategy can be lucrative for the short term, but it also comes with risks.
One risk is government intervention and regulation to prevent abuse of market power. When a firm has a monopoly position, it can abuse its power to charge unfair prices and limit competition, which can harm consumers and the overall economy. To prevent such abuse, governments may impose regulations or antitrust laws to ensure that firms with market power behave fairly and do not harm consumers or competitors.
Another risk is the emergence of new technologies or substitutes that can threaten the firm's monopoly position in the future. For example, the rise of e-books has disrupted the publishing industry, challenging the monopoly position of traditional publishers. Similarly, the emergence of renewable energy sources has disrupted the fossil fuel industry. Therefore, firms with a monopoly position must be aware of the potential threats from new technologies and competitors and adapt accordingly to remain competitive.
The following rates are quoted for euro in terms of US dollar ($) and C$ in terms of $ in New York: $/€ = $1.1520 $/C$= $0.7520 (a) What are the (implied) quote for $ in terms of euro (i.e., €/$) and for $ in terms of C$ (C$/$) in the above rates? (b) What is the cross rate for C$ in terms of € (€/C$) implied in the above rates?
The implied cross rate for C$ in terms of € (€/C$) is approximately 0.6523.
(a) To find the implied quote for $ in terms of euro (€/$) and for $ in terms of C$ (C$/$), we need to find the reciprocal of the given rates:
1. For €/$, take the reciprocal of $/€ = $1.1520:
€/$ = 1 / $1.1520
€/$ ≈ 0.8678
2. For C$/$, take the reciprocal of $/C$ = $0.7520:
C$/$ = 1 / $0.7520
C$/$ ≈ 1.3298
So, the implied quotes are €/$ ≈ 0.8678 and C$/$ ≈ 1.3298.
(b) To find the cross rate for C$ in terms of € (€/C$), we will use the given rates:
€/C$ = (€/$) / (C$/$)
Using the values we found in part (a):
€/C$ = 0.8678 / 1.3298
€/C$ ≈ 0.6523
The implied cross rate for C$ in terms of € (€/C$) is approximately 0.6523.
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larry recorded the following donations this year:$660 cash to a family in need$2,720 to a church$580 cash to a political campaignto the salvation army household items that originally cost $1,360 but are worth $700.what is larry's maximum allowable charitable contribution if his agi is $60,800?
Larry's maximum allowable charitable contribution is $1,710, given his AGI of $60,800.
To determine Larry's maximum allowable charitable contribution, we need to calculate the limit based on his Adjusted Gross Income (AGI) and the type of organization he made donations to.
Cash donation to a family in need: This is a donation to an individual or non-charitable organization and is not deductible.
Donation to a church: Donations to religious organizations, like churches, are generally tax-deductible. The limit for charitable contributions to churches is 50% of AGI. So, Larry's maximum allowable contribution for his donation to the church is:
$2,720 * 50% = $1,360
Cash donation to a political campaign:
Donations to political campaigns are not tax-deductible.
Donation of household items to the Salvation Army:
Donations of household items to qualified charitable organizations, like the Salvation Army, are generally tax-deductible. The limit for non-cash donations is 30% of AGI. However, when the property is used by the charity for its tax-exempt purposes, like in this case, the limit is increased to 50% of AGI. The original cost of the household items was $1,360, but their current worth is $700. Larry can claim a deduction for the current worth of the items, which is $700.
So, his maximum allowable contribution for this donation is:
$700 * 50% = $350
Now, we can calculate Larry's total maximum allowable charitable contribution:
$1,360 (church donation) + $350 (Salvation Army donation) = $1,710
Therefore, Larry's maximum allowable charitable contribution is $1,710, given his AGI of $60,800.
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Your broker charges $0.0028 per share per trade. The exchange charges $0.0167 per share per trade for removing liquidity and credits $0.0149 per share per trade for adding liquidity. The current best BID price for stock XYZ is $81.77 per share, while the current best ASK price is $81.78 per share. You post an order to buy XYZ at the current best BID price and wait. Shortly after, the best BID and ASK prices move lower (down) by one cent each. Your buy order is executed. Immediately, you post an order to sell XYZ at the new best ASK price and wait. Shortly after, the best BID and ASK prices move higher (up) by one cent each. Your sell order is executed. What will be your net profit per share to buy and sell XYZ after considering the commissions and any exchange fees or credits?
The net profit per share for buying and selling XYZ after considering the commissions and exchange fees/credits is $0.0024.
How to calculate the net profit per share?To calculate the net profit per share, we need to consider the following costs and revenues:
Broker commission: $0.0028 per share per trade
Exchange fee for removing liquidity: $0.0167 per share per trade
Exchange credit for adding liquidity: $0.0149 per share per trade
Let's first calculate the total cost of buying and selling one share of XYZ:
Buying cost: $81.77 (BID price) + $0.0028 (broker commission) + $0.0167 (exchange fee for removing liquidity) = $81.7895
Selling revenue: $81.78 (ASK price) - $0.0028 (broker commission) + $0.0149 (exchange credit for adding liquidity) = $81.7919
The net profit per share is the difference between the selling revenue and buying cost:
Net profit per share = Selling revenue - Buying cost = $81.7919 - $81.7895 = $0.0024
Therefore, the net profit per share for buying and selling XYZ after considering the commissions and exchange fees/credits is $0.0024.
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payment history, age of accounts, credit usage, and types of accounts are factors considered in calculating a credit score. what's also a factor?
The total amount due on all accounts is taken into consideration when establishing a credit score. By dividing the entire amount of outstanding balances by the aggregate credit limit across all accounts, credit utilization—also known as credit use—is computed.
Another factor that is considered in calculating a credit score is the total amount of debt owed on all accounts. This is known as credit utilization and is calculated by dividing the total amount of outstanding balances by the total credit limit across all accounts. A high credit utilization ratio can negatively impact a credit score, while a lower ratio can have a positive effect. It is important to maintain a good payment history, have a mix of different types of accounts, and keep credit utilization low in order to maintain a healthy credit score.
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In the affiliate revenue model, firms derive revenue by selling information or services through partner e-commerce sites. (1 Point) True False
The statement "In the affiliate revenue model, firms generate revenue by promoting and selling products or services through partner e-commerce sites" is false. The revenue is earned through commissions or a percentage of the sale made through the affiliate link.
The model is based on performance-based marketing, where the affiliate earns a commission only if a sale or lead is generated through their referral.
The affiliate revenue model has become increasingly popular in recent years as it provides a cost-effective way for firms to expand their reach and increase sales without having to invest in expensive marketing campaigns.
E-commerce sites benefit from this model as well by earning commissions on sales they wouldn't have otherwise made without the help of the affiliate.
In summary, the affiliate revenue model is a win-win situation for both firms and e-commerce sites, as it allows them to increase revenue and expand their customer base without incurring significant costs.
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(Related to Checkpoint 10.1) (Common stock valuation) Header Motor, Inc., paid a $2.54 dividend last year. At a constant growth rate of 4 percent, what is the value of the common stock if the investors require a 9 percent rate of return? The value of the common stock is $ (Round to the nearest cent.)
To calculate the value of the common stock of Header Motor, Inc., we can use the dividend discount model (DDM) formula, which is:
Value of Stock = Dividend / (Required Rate of Return - Growth Rate)
Here, the dividend paid last year by the company is $2.54, the growth rate is 4%, and the required rate of return by investors is 9%. Plugging these values into the formula, we get:
Value of Stock = $2.54 / (0.09 - 0.04) = $63.50
Therefore, the value of the common stock of Header Motor, Inc. is $63.50.
This means that investors are willing to pay $63.50 for each share of the company's common stock, considering its dividend payment and growth rate, and the required rate of return by investors. It also indicates that the higher the growth rate and lower the required rate of return, the more valuable the stock will be.
It's important to note that the DDM formula is based on certain assumptions and may not reflect the actual market value of the stock, which can be influenced by various factors such as market trends, industry performance, and company-specific events. Therefore, it's essential to conduct a comprehensive analysis of the company's financials and other relevant information before making investment decisions.
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a business has undergone a rash of break-ins and burglaries. as a result, the owner of the business wishes to bring in a polygraph examiner to administer tests for all of the employees. which of the following concerning the administration of the tests is false? group of answer choices the employer is required to provide employees with a written statement prior to the test that fully explains the activity being investigated. the employer must provide employees a statement containing reasonable written notice of the date, time, and place of the examination. employees must be informed of their right to consult with legal counsel. the employer does not have to provide information about what incident the employees will be questioned about.
In the scenario where a business owner wishes to administer polygraph tests to all employees due to break-ins and burglaries, the false statement among the given choices is "the employer does not have to provide information about what incident the employees will be questioned about."
In this situation, the employer is required to provide employees with a written statement prior to the test that fully explains the activity being investigated. The employer must also provide employees a statement containing reasonable written notice of the date, time, and place of the examination. Additionally, employees must be informed of their right to consult with legal counsel before taking the polygraph test. However, the employer cannot withhold information about the incident that employees will be questioned about as this can affect the accuracy of the test results and infringe upon the rights of the employees.
The false statement is "the employer does not have to provide information about what incident the employees will be questioned about."
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which statement below is true of central banks? they are introduced when consumers lose confidence in the bank or the system as a whole. they were developed by the founding fathers in order to ensure strict banking practices. they allow a bank to loan out money to other banks. they have a variety of tools that can be used to control the money supply
The statement below is true of central banks they were developed by the founding fathers in order to ensure strict banking practices.
Quizlet: What responsibilities do central banks have?The central bank offers the Central Government services. On behalf of the government, it both collects and makes payments to other parties. It looks after and manages government deposit accounts. The central bank also offers loans and controls the nation's debt.
What was the first actual central bank, when was it established, and what impact did it have on banking?The main goal of the Federal Reserve, which was established in 1913 by an act of Congress, was to increase the stability of the American financial system.
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eBook Farley Inc. has perpetuul preferred stock outstanding that sells for $38 a share and pay a dividend of 54.75 at the end of each year. What is the required rate of return? Round your answer to two decimal places 2
The required rate of return for the perpetuul preferred stock of eBook Farley Inc. can be calculated using the dividend discount model. This model takes into consideration the current market price of the stock and the expected dividend payment.
In this case, the market price of the stock is given as $38 per share and the dividend payment is $54.75 per share at the end of each year. To calculate the required rate of return, we can use the following formula:
Required Rate of Return = Dividend Payment / Market Price of Stock
Substituting the given values, we get:
Required Rate of Return = 54.75 / 38
Required Rate of Return = 1.44 or 144%
Therefore, the required rate of return for the perpetuul preferred stock of eBook Farley Inc. is 144%. This means that investors require a return of 144% on their investment in the stock to compensate for the risk they are taking.
It is important to note that the required rate of return may vary for different investors depending on their risk preferences, investment objectives, and other factors. Investors should carefully consider these factors before investing in any stock.
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The Didn'tKnowFinanceWasSoFun Company issued a $1,000 par value, 5% coupon, 12 year bond. The interest is paid semiannually and the market is currently requiring 7% on this risk level bond. What is the current value of the bond?
SHOW ALL WORK FOR FULL CREDIT USING EITHER THE MYLAB Calculator or the TI BAII PLUS Calculator.
The current value of the bond can be calculated using the present value formula:
PV = (C / (1 + r/n)^(nt)) + (FV / (1 + r/n)^(nt))
Where:
PV = Present value of the bond
C = Coupon payment (5% of $1,000 = $50)
r = Required rate of return (7%)
n = Number of compounding periods per year (2, since interest is paid semiannually)
t = Number of years until maturity (12)
Plugging in the values, we get:
PV = (50 / (1 + 0.07/2)^(212)) + (1000 / (1 + 0.07/2)^(212))
PV = $609.65
Therefore, the current value of the bond is $609.65.
To calculate this using a calculator such as the TI BAII Plus, we would enter:
N = 24 (2 compounding periods per year for 12 years)
I/Y = 3.5 (7% annual rate divided by 2 compounding periods per year)
PMT = 25 (5% coupon payment semiannually on $1,000 par value)
FV = 1000 (par value at maturity)
And then press the PV button to get the present value of $609.65.
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Gonzales is a closely held corporation considering a major expansion. The proposed expansion would require the firm to raise $10 million in additional capital. Because Gonzales currently has 50 percent debt and because the family members already have all their funds tied up in the business, the owners cannot supply any additional equity, so the company will have to sell stock to the public. The family wants to ensure that it will retain control of the company. This offering would be Gonzales’s first stock sale, and the owners are not sure exactly what would be involved. For this reason, they have asked you to research the process and to help them decide how to raise the needed capital. In doing so, you should answer the following questions: Is the stock of Gonzales Food Stores currently publicly held or privately owned? Would this situation change if the company undertook a stock sale? What are the disadvantages and advantages of going public?`
The stock of Gonzales Food Stores is currently privately owned since it is a closely held corporation, meaning it has a limited number of shareholders, primarily consisting of family members. This would involve issuing shares to the general public through an initial public offering (IPO).
Advantages of going public include:
1. Access to a larger pool of capital to fund the expansion
2. Increased visibility and credibility in the market
3. Easier access to future financing through the issuance of additional shares or debt securities
4. Increased liquidity for shareholders, allowing them to sell their shares more easily
Disadvantages of going public include:
1. Loss of control for the family members as outside investors purchase shares
2. Increased regulatory requirements and scrutiny, leading to higher administrative and compliance costs
3. Pressure from shareholders to maintain consistent financial performance
4. Potential dilution of ownership for existing shareholders
To ensure that the family retains control of the company, they may consider issuing different classes of shares, with the family retaining shares with greater voting rights. This will allow them to maintain control while still raising the necessary capital through the stock sale.
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lead capacity strategy is a reactive approach that adjusts its capacity in response to demand. true false
The statement is false. The lead capacity strategy is a proactive approach that involves increasing capacity in anticipation of future demand.
This strategy requires careful forecasting and planning to ensure that the capacity increase aligns with expected demand levels. By increasing capacity in advance, companies can avoid shortages and backlogs, improve customer satisfaction, and reduce the risk of lost sales.
This approach also allows companies to take advantage of economies of scale and reduce unit costs, which can lead to increased profitability. Overall, the lead capacity strategy is a proactive approach that aims to ensure that a company has sufficient capacity to meet future demand.
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when 's share price reached $745 per share, had an eps of $26.5 and an estimated market capitalization rate of 11.5%. pays no dividends. approximately how much is the pvgo in 's stock price?
The PVGO in 's Stock price is about $280.09.
To calculate the present value of growth opportunities (PVGO), we first want to calculate the intrinsic price of the stock using the dividend discount model (DDM):
Intrinsic cost = EPS / (r - g)
in which
EPS = profits according to share
r = market capitalization fee
g = predicted growth rate
given that does not pay any dividends, we are able to use the income in line with proportion (EPS) as a proxy for the dividend.
the use of the given information, we've got:
EPS = $26.5
r = 11.5%
share price = $745 according to proportion
To locate the expected growth charge (g), we will use the Gordon increase model:
percentage charge = (EPS * (1 + g)) / (r - g)
Rearranging the formula, we get:
g = (r * EPS - percentage fee * (r - 1)) / share price
Substituting the given values, we get:
g = (0.115 * $26.5 - $745 * (0.115 - 1)) / $745 = -0.105
The negative increase charge means that the marketplace expects the agency's profits to say no inside the future. this will occur because of various factors along with multiplied competition, adjustments in market situations, and so on.
Now, we can calculate the intrinsic value of the stock using the DDM formula:
Intrinsic price = EPS / (r - g) = $26.5 / (0.115 - (-0.one zero five)) = $464.91
In the end, we will calculate the PVGO by way of subtracting the intrinsic fee from the current inventory charge:
PVGO = proportion charge - Intrinsic value = $745 - $464.91 = $280.09
Consequently, the PVGO in 's inventory price is about $280.09.
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The marketing team of "Hi" restaurant reduced the price of their special triple-decker with double cheese Gut Bomb from $4.35 to $3.75 in the hope of stimulating sales during the month of March. The total fixed costs of the restaurant increased by $5,700 in March due to the promotion of the special in the local press and printing advertising leaflets to be used inside the restaurants. The variable costs of the Gut Bomb remained the same at $1.47 per item. How many Gut Bomb specials must be sold during March to break-even with this new program?
The Hi restaurant must sell 2,500 Gut Bomb specials during the month of March to break-even with the new promotion. If they sell less than 2,500, they will not cover their fixed costs and will incur a loss. If they sell more than 2,500, they will make a profit.
The contribution margin per unit can be calculated as follows:
Contribution Margin = Selling Price per Unit - Variable Costs per Unit
Selling Price per Unit = $3.75 (as the price has been reduced from $4.35 to $3.75)
Variable Costs per Unit = $1.47 (as the variable costs of the Gut Bomb remained the same)
Therefore, Contribution Margin per Unit = $3.75 - $1.47 = $2.28
Now, we can calculate the break-even point by dividing the total fixed costs incurred during the month of March by the contribution margin per unit:
Break-even Point = Total Fixed Costs / Contribution Margin per Unit
Total Fixed Costs = $5,700 (as stated in the question)
Contribution Margin per Unit = $2.28 (as calculated above)
Therefore, Break-even Point = $5,700 / $2.28 = 2,500 Gut Bomb specials
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Carnes Cosmetics Co.'s stock price is $55, and it recently paid a $1.so dividend. This dividend is expected to grow by 21% for the next 3 years, then grow forever at a constant rate, 9; and ts - 14%. At what constant rate is the stock expected to grow after Year 3? Do not round intermediate calculations. Round your answer to two decimal places.
Answer:
The constant growth rate after Year 3 is expected to be 9.65%.
Explanation:
To calculate the constant growth rate after year 3, we can use the dividend discount model.
First, we need to calculate the dividend per share at the end of each of the next three years:
Year 1 dividend = $1.00 x (1 + 21%) = $1.21
Year 2 dividend = $1.21 x (1 + 21%) = $1.46
Year 3 dividend = $1.46 x (1 + 21%) = $1.77
Next, we need to calculate the expected price of the stock after three years, which is the present value of all future dividends:
PV = D1 / (1 + r) + D2 / (1 + r)^2 + D3 / (1 + r)^3 + P3 / (1 + r)^3
where D1, D2, and D3 are the dividends for the next three years, P3 is the expected stock price at the end of Year 3, and r is the required rate of return.
Assuming a required rate of return of 14%, we can solve for P3:
P3 = (1.77 x 1.21 x 1.14^2 + 1.77 x 1.14^2 + 55) / (1 + 0.14)^3
P3 = $59.06
Finally, we can use the Gordon growth model to calculate the constant growth rate after Year 3:
P3 = D4 / (r - g)
59.06 = 1.77 x (1 + g)^3 / (0.14 - g)
Solving for g, we get:
g = 9.65%
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the risk that a misstatement could occur in an assertion and would not be prevented, or detected and corrected, on a timely basis by the entity's internal control is known as
The risk that a misrepresentation will occur in an assertion and will not be prevented, recognized, or corrected on time by the entity's internal control is referred to as "control risk."
The danger of a major misstatement in an assertion that is not prevented, discovered, or corrected by the entity's internal control system is known as the control risk.
Auditors evaluate the efficacy of an organization's internal controls, which are the systems and procedures in place to help assure financial reporting accuracy and compliance with laws and regulations. A high level of control risk raises the possibility that an auditor will need to do more substantive testing to assure financial statement correctness.
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which of the following is not a component of the dupont analysis? a. asset turnover b. profit margin c. debt-to-equity ratio d. equity multiplier
The equity multiplier is not a component of the Dupont Analysis. The equity multiplier is a financial ratio used to measure the amount of leverage a company is using.
It is calculated by dividing a company’s total assets by its total equity. The Dupont Analysis, on the other hand, is used to analyze a company’s financial performance. It does this by breaking down return on equity into three components: return on assets, asset turnover, and equity multiplier.
The equation for the Dupont analysis is ROE = (Net Profit/Sales) x (Sales/Assets) x (Assets/Equity). By breaking down return on equity into these three components, the Dupont analysis allows investors to gain a better understanding of a company’s financial performance.
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on february 1, a customer's account balance of $3,400 was deemed to be uncollectible. what entry should be recorded on february 1 to record the write-off assuming the company uses the allowance method?
Answer: To record the write-off of a customer's account balance of $3,400 on February 1 using the allowance method, following journal entry should be made:
1. Debit "Allowance for Doubtful Accounts" for $3,400.
2. Credit "Accounts Receivable" for $3,400.
This entry reduces both the Allowance for Doubtful Accounts and Accounts Receivable by the uncollectible amount, maintaining the accuracy of your financial records.
What is Allowance for Doubtful Accounts? These accounts are contra accounts( i.e., where entry is recorded when debit and credit affect the same parent account, resulting in net zero effect on account), that nets against the total receivable presented on balance sheet to reflect only the amount that is expected to be paid. It estimates the percentage of accounts receivable that are expected to be uncollectible. Although, the actual payment behavior of customers may differ from the estimate.
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Consider the following case: Falcon Freight is evaluating a proposed capital budgeting project (project Sigma) that will require an initial investment of $750,000. Falcon Freight has been basing capital budgeting decisions on a project's NPV; however, its new CFO wants to start using the IRR method for capital budgeting decisions. The CFO says that the IRR is a better method because returns in percentage form are easier to understand and compare to required returns. Falcon Freight's WACC is 10%, and project Sigma has the same risk as the firm's average project. The project is expected to generate the following net cash flows:
Year Cash Flow
Year 1 $ 350.000
Year 2 $ 475.000
Year 3 $ 400.000
Year 4 $ 475.000
Which of the following is the correct calculation of project Sigma's IRR? a.41.00% b.36.90% c.34.85% d.38.95%
The IRR (Internal Rate of Return) of project Sigma is 38.95%. Therefore, the correct option is D.
To calculate the IRR (Internal Rate of Return), we can use the following steps:1. Set the NPV (Net Present Value) equation to zero, which includes the initial investment and the discounted cash flows for each year.
0 = -$750,000 + ($350,000 / (1 + IRR)^1) + ($475,000 / (1 + IRR)^2) + ($400,000 / (1 + IRR)^3) + ($475,000 / (1 + IRR)^4)
2. Solve for the IRR using trial and error, a financial calculator, or software such as Excel's IRR function.
After calculating the IRR using any of these methods, you will find that IRR (Internal Rate of Return) is 38.95%.
Hence, the correct calculation of project Sigma's IRR is option D: 38.95%.
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the customer service life cycle consists of four stages. in which stage does the customer begin thinking about repurchasing, trading in, or dismissing old products?
The stage in which the customer begins thinking about repurchasing, trading in, or dismissing old products is the post-purchase evaluation stage, which is the fourth and final stage in the customer service life cycle.
In this stage, the customer evaluates their satisfaction with the product or service and considers whether they would purchase it again or recommend it to others. The post-purchase evaluation stage is crucial for building customer loyalty and can lead to repeat business and positive word-of-mouth advertising.
Companies should strive to ensure that their customers are satisfied and happy with their purchase in order to encourage future purchases and customer loyalty.
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Assume Highline Company has just paid an annual dividend of $1.03. Analysts are predicting an 10.9% per year growth rate in earnings over the next five years. After then, Highline's earnings are expected to grow at the current industry average of 4.9% per year. If Highline's equity cost of capital is 7.7% per year and its dividend payout ratio remains constant, for what price does the dividend-discount model predict Highline stock should sell? The value of Highline's stock is $ (Round to the nearest cent.)
The price predicted by the dividend-discount model for Highline's stock is $34.41.
Using the dividend-discount model, the value of Highline's stock can be calculated as follows:
PV = D1/(r-g)
where:
PV = Present value of stock
D1 = Expected dividend one year from now
r = Equity cost of capital
g = Expected growth rate of dividends
To find D1, we need to calculate the expected dividend for next year based on the current dividend and the expected growth rate:
D1 = D0 x (1 + g) = $1.03 x (1 + 0.109) = $1.1397
where:
D0 = Current dividend
Next, we can substitute the values into the formula:
PV = $1.1397 / (0.077 - 0.049) = $34.41
Therefore, the dividend-discount model predicts that Highline's stock should sell for $34.41.
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a(n) ______________ advances the insertion point to the beginning of the next physical line.
A(n) "hard return" or "carriage return" advances the insertion point to the beginning of the next physical line. A hard return is a character inserted into a document or text field that tells the computer to start a new line or paragraph.
A hard return is a type of line break that is created when the "Enter" key is pressed on a computer keyboard. It is called a "hard" return because it creates a physical break in the text and moves the cursor or insertion point to the next line. Hard returns are commonly used in documents and other types of text to create paragraphs, headings, and other formatting elements. In contrast, a soft return, also known as word wrap, is a feature that automatically moves text to the next line when the end of the line is reached without requiring the user to manually insert a hard return. Soft returns are commonly used in word processing programs and other software applications to make text more readable and to ensure that it fits within the available space. Hard returns and soft returns serve different purposes and are used in different contexts, but they both play an important role in creating well-formatted and easily readable text.
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A "carriage return" advances the insertion point to the beginning of the next physical line.
A carriage return, sometimes known as a cartridge return and often shortened to CR, <CR> or return, is a control character or mechanism used to reset a device's position to the beginning of a line of text. It is closely associated with the line feed and newline concepts, although it can be considered separately in its own right.
Originally, the term "carriage return" referred to a mechanism or lever on a typewriter. For machines where the type element was fixed and the paper held in a moving carriage, this lever was on the left attached to the moving carriage, and operated after typing a line of text to cause the carriage to return to the far right so the type element would be aligned to the left side of the paper. The lever would also usually feed the paper to advance to the next line.
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