Answer:
horizon value at year 5 = $94.3444
current intrinsic intrinsic value P₀ = $47.73
Assuming that the markets are in equilibrium, Goodwin's current expected dividend yield is and Goodwin's capital gains yield is <u>0(it pays no dividends)</u>.
Goodwin has been very successful, but it hasn't paid a dividend yet. It circulates a report to its key investors containing the following statement:
Goodwin's investment opportunities are poor.
Is this statement a possible explanation for why the firm hasn't paid a dividend yet?
<u>B. False</u>
Generally companies that are experiencing a rapid growth do not pay dividends, because they need all the cash that they can use to finance their expansion. Sometimes mature companies that have a steady growth rate will also choose not to pay dividends because they consider themselves as solid investments and not paying dividends allows them to grow more and should increase stockholders' wealth more.
Explanation:
D₃ = $5.50
D₄ = $7.073
D₅ = $9.096
D₆ = $9.642 (and a constant growth rate of 4.38%
Re = 14.60%
horizon value at year 5 = $9.642 / (14.6% - 4.38%) = $94.3444
intrinsic value P₀ = $94.3444 / 1.146⁵ = $47.73
Answer: $112000
Explanation:
First, we calculate the book value in year 7 which will be:
= Depreciation × Balance life
= $400,000 × 3/10
= $120,000
Then, the cash flow as a result of the transaction will be:
= Asset sale - (Asset - Book value) × Tax rate
= 110000 - [(110000 - 120000) × 20%]
= 110000 - (-2000)
= 110000 + 2000
= 112000
Answer:
The sale of Miko's car to Pye for $4,500
Explanation:
Article 2 of the uniform commercial code (UCC) covers the sale of goods, but it doesn't cover the sale of services, securities or real property.
The only transaction that involves the sale of goods happened when Miko sold her car to her neighbor. When you rent something, you are providing a service, the same happens with a trip (transportation and lodging services).
Answer:
The opportunity cost is $130,000 for the four year duration.
Explanation:
Here, it is clear that I will not go to the job, so going to university is the only option left. Now, the loss of the job income is also an opportunity cost with an amount $20,000 which will aggregated with the University specific costs.
University Specific cost for 4 Years = 4 * (Tuition Cost + Textbooks + Job Opportunity loss)
The room and board cost is common between college and the university so it must not be considered for the decision making.
By putting values, we have:
University Specific cost for 4 Years = 4 * ($10,000 + $2,500 + $20,000)
University Specific cost for 4 Years = $130,000 for the four years
The opportunity cost is $130,000 for the four year duration.
For better understanding of relevant costing (Opportunity cost analysis), consider the following question:
brainly.com/question/14423321
