Why should you avoid the use of sarcasm , cliches, and idioms in business letters?

Good Investments Company forecasts a $2.44 dividend for 2017, $2.62 dividend for 2018 and a $2.77 dividend for 2019 for Mountain

Ivan

Answer:

c.$29.37

Explanation:

First and foremost, it should be borne in mind that the intrinsic value of Mountain Vacations Corporation is the present value of its future dividends for the forecast period(2017-2019) plus the present value of dividend terminal value beyond the forecast period as shown thus:

Year 1 (2017) dividend $2.44

Year 2 (2018) dividend $2.62

Year 3 (2019) dividend $2.77

the terminal value of dividend=expected dividend per year after 2019/ cost of equity capital

expected dividend per year after 2019= $2.94

cost of equity capital =7%

terminal value=$2.94 /7%=$42.00

PV of future dividend=dividend/(1+cost of equity capital)^n

n is the year in which the future dividend is expected, it is 1 for 2017, 2 for 2018 , 3 for 2019 dividend and the terminal value(since the terminal value is already stated in 2019 terms)

intrinsic value of share=$2.44/(1+7%)^1+$2.62/(1+7%)^2+$2.77/(1+7%)^3+$42.00/(1+7%)^3

the intrinsic value of share=$41.11

It is obvious that the options are not correct

The question's inputs are wrong

2017 dividend should have been $1.74

2018 dividend should have been $1.87

2019 dividend should have been $1.98

dividend beyond 2019 should have been $2.10

terminal value=$2.10/7%=$30.00

intrinsic value of share=$1.74/(1+7%)^1+$1.87/(1+7%)^2+$1.98/(1+7%)^3+$30.00/(1+7%)^3

intrinsic value of share=$29.36(closest to c.$29.37)

6 0

2 years ago

Last year, Kaylor Equipment had $15,900 of sales, $500 of net new equity, dividend payments of $75, an addition to retained earn

ArbitrLikvidat [17]

Answer:

$1,135.05

Explanation:

Given:

Sales = $15,900

Net new equity = $500

Dividend payments = $75

Retained earnings = $418

Depreciation = $680

Interest expense = $511

Tax rate = 21% = 0.21

Now,

Net income = Retained earnings + Dividend payments

= $418 + $75

= $493

Profit before tax = Net income ÷ ( 1 - tax rate )

= $493 ÷ ( 1 - 0.21 )

= $624.05

Therefore,

Earnings before interest and taxes

= Profit before tax + Interest expense

= $624.05 + $511

= $1,135.05

4 0

2 years ago

Sarah is a freshman high school student who is also holding down a 20-hour-a-week job. she drinks diet cola several times a day

AURORKA [14]

<span>As Sarah is young, increasing her calcium intake at a younger age can help with bone density at a later age. This can help ward off osteoporosis and other bone-related diseases that can be caused by a lack of sufficient nutrient intake. In addition, the increased soda consumption, even as a diet alternative, lead to negative health effects because of the ingredients in the soda and the lack of nutritional value in the carbonated drink.</span>

6 0

2 years ago

Diogo has a utility function,U(q1, q2) = q1 0.8 q2 0.2,where q1 is chocolate candy and q2 is slices of pie. If the price of slic

guapka [62]

Answer:

$(0.5 \times 8q_2)+q_2=100\\\\5q_2=100\\\\q_2=20$

since $q_2 = 20$

$q_1 = 8*20\\\\q_1=160$

Explanation:

U(q₁ q₂)

$q_1^{0.8}q_2^{0.2}\\\\P_1= \$0.5 \ P_2=\$1 \ Y=100$

Budget law can be given by

$P_1q_1+P_2q_2=Y\\\\0.5q_1+q_2=100$

Lagrangian function can be given by

$L=q_1^{0.8}q_2^{0.2}+ \lambda (100-0.5q_1-q_2)$

First order condition csn be given by

$\frac{dL}{dq} =0.8q_1^{-0.2}q_2^{0.2}-0.5 \lambda=0\\\\0.5 \lambda=0.8q_1^{-0.2}q_2^{0.2}---(i)$

$\frac{dL}{dq} =0.2q_1^{0.8}q_2^{-0.8}- \lambda=0\\\\ \lambda=0.2q_1^{0.8}q_2^{-0.8}---(ii)$

$\frac{dL}{d \lambda} =100-0.5q_1-q_2=0\\\\0.5q_1+q_2=100---(iii)$

From eqn (i) and eqn (ii) we have

$\frac{0.5 \lambda}{\lambda} =\frac{0.8q_1^{-0.2}q_2^{0.2}}{0.2q_1^{0.8}q_2^{-0.8}} \\\\0.5=\frac{4q_2}{q_1}\\\\q_1=8q_2}$

Putting $q_1=8q_2$ in euqtion (iii) we have

$(0.5 \times 8q_2)+q_2=100\\\\5q_2=100\\\\q_2=20$

since $q_2 = 20$

$q_1 = 8*20\\\\q_1=160$

3 0

2 years ago

A group of 72 people travel to the beach for a clean-up day. some of the people bring their own supplies (such as gloves, water,

ZanzabumX [31]

<span>To calculate the number of people for whom to provide supplies for (B) you need to subtract the number of people who brought their supplies (P) from the overall number of people (72). B=72-P</span>

4 0

2 years ago

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