Answer:
Horizon value is $22.59
Intrinsic value is $16.32
Explanation:
D3=1.5000
D4=1.5000*(1+7.8%)
D4=1.6170
D5=1.6170
*(1+7.8%)
D5=1.7431
D6=1.7431
*(1+3.42%)
D6=1.8027
horizon value is the same as the price of the stock(the terminal value) using the dividend in year 6
P=D5*(1+g)/(r-g)
D5=$1.7431
g is the constant growth rate of 3.42%
r is the required rate of return of 11.40%
P=$1.7431*(1+3.42%)/(11.40%-3.42%)
P=$1.8027/0.0798
=$22.59
Goodwill Technologies share price is $22.59
Current intrinsic value is the dividends payable in relevant years plus the horizon value discount to present value as follows:
Present value of D3 =1.5000/(1+11.40%)^3=$1.0850
present of value of D4 =1.6170
/(1+11.40%)^4=$1.0500
present value of D5 =1.7431
/(1+11.40%)^5=1.0160
present value of horizon value=$22.59/(1+11.40%)^5=13.1671
Total present values $16.32
Answer:
Both April and Wayne
Explanation:
As per common law, principal is a person who designates another person to establish legal relationship with a third party on behalf of him. The person who acts on behalf of the principal is called an agent.
In this case, Steve acts on behalf of April and enter into a contract with Wanda who acts on behalf of Wayne. So, April and Wayne are principals and Steve and Wanda are agents.
Answer:
- The balance in the subsidiary ledger will equal the balance of its supported account in the general ledger.
- The account which the subsidiary ledger supports in the general ledger is called a control account.
- It is a supporting ledger that contains detailed information about a general ledger account.
- Two of the most common subsidiary ledgers are for Accounts Payable and Accounts Receivable.
Explanation:
A subsidiary ledger is defined as a supporting ledger that contains details of an account on the general ledger.
It gives a breakdown of the single amount that reflects in a general ledger account.
For example if the accounts payable account has a balance of $50,000, the subsidiary ledger will show the individual transactions that make up the $50,000.
Therefore the balance of the subsidiary ledger will equal the amount in the general ledger account.
Answer:
D. higher profits will induce expanded production.
Explanation:
If the price of a good increases and the cost remains the same ,profits earned would increase.
For example if price of a pen was initially $5 and rose to $7. The cost of making a pen is $3. Total profit would rise from $2 to $4.
According to the law of supply, the higher the price, the higher the quantity supplied and the lower the price, the lower the. quantity supplied. Therefore, the higher price would attract more producers and production would increase. Existing producers would also increase output.
I hope my answer helps you.
Answer: D). employment variability
Explanation: Chances are he was skilled in whatever task he was assigned to. If the company is expandeing then they moast likly found a way to replace him to save on money.
