As it is known that future cash flows are
risky in nature so it is not possible to discount them at risk free rate. So
investor must discount the future cash flows based on the equity cost of
capital. It is the expected return of the other investments available in the market
with same kind of risk to the firm’s share.
Price of the stock can be found by using
the cost of equity equation which is as follows:
Po = Div_1 + P_1 / 1 + r_E
$15 = 0.8 + X / 1.12
X = $16
So the expected selling price of the
stock is $16.00
Answer:
<u> The correct answer is:</u> the changes in the situation that would result from a given action.
Explanation:
Marginal analysis is an extremely important tool for the organizational decision-making process, because through this analysis it is possible to compare costs and benefits of a financial strategy, analyzing costs and results in order to increase the company's profitability.
This therefore constitutes a cost-benefit analysis technique, for example, when buying or investing in a product, its benefits and utilities are considered, so for a marginal change to be adopted, the acquired benefits need to outweigh the costs.
This is known as family branding. Family branding or also
known as umbrella branding is a marketing strategy that uses a single brand
name in marketing the products. The family branding develops familiarity in the
market due to its name and logo. This helps their new product lines to get
distinguished in the market.
They can recover the lost revenue that they would have expected to earn if their park had been open on time.
