<span>If the comp sold for $199,000 but includes a $3000 porch and the subject has no porch, then we subtract the value of the porch to yield a base for the comparable of $196,000. Then, since the comparable has no pool or chimney, we add these values - $8,000 and $2,000, respectively - to that base value to yield an adjusted value of $196,000 + $8,000 + $2,000 = $206,000.</span>
Answer:value of stock for the required return of 12 % = $53
Explanation:
Given
current dividend just paid = $3.00
dividend to grow at constant rate of 6%
required rate of return =12%
to calculate the value of stock for the requitred return of 12 % , we use the dividend growth model which is
Current price = dividend ( 1 + growth rate )/ (required rate -growth rate )
= 3 x (1+6%) / 12-6 = 3 x 1.06 /6% =3.18/0.06= $53
Therefore value of stock for the requitred return of 12 % ,= $53
Answer:
PV of lease annuity is $25000
Explanation:
As the paymengt will be made at the end of the year, the annuity is an ordinary annuity. We will calculate the present value of the ordinary annuity using the following formula,
PV Annuity = PMT * [( 1 - (1+r)^-n) / r]
Where,
- PMT is periodic payment
- r is discount rate per peiod
- n is number of periods
Thus,
PV of annuity = 3895.5 * [( 1 - (1+0.09)^-10) / 0.09]
PV of annuity = $24999.985 rounded off to $25000
<span>The AICPA rules would enforce that he is not allowed to join the board since he would be considered a firm professional. This would prevent a conflict of interest where he would serve as a director of a client. The AICPA is the American Institute of Certified Public Accountants.</span>
Answer: True
Explanation:
The agency problem is when there is a conflict of interest between the management of a company and the stockholders that exists in the company.
In order to help reduce the potential agency conflicts that at occur during the course of a business, a few of the institutional investors often bring in the pressure of the direct shareholder on the management of a firm. They believe by involving the shareholders, the management will try not to have any differences with the shareholders and thereby reducing agency problem.
