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:
False
Explanation:
Correlation tells you if there is association between two or more variables. Regression analysis model allow you to predict one variable from the other.
Possibly the answer could be “goods”
In the question above, Walt asks for 10 gallons of gas while Jessie asks for $10 worth of gas. In both the cases, the drivers need gas but Walt is concerned about the quantity of gas and Jessie is concerned about the price of the gas.
In case of Walt, the price elasticity of demand is zero because he want 10 gallons of gas regardless of the price of gas per gallon. While in case of Jessie, the price elasticity of demand is one because he wants to buy gas worth $10, no matter what is the price of the gas per gallon.
Distance ran by Chris Gilbert, D = 96 yards
Speed, S = 4.9 s / 40 yards
Time ran by Chris Gilbert, T = D x S
T = (96 yards) x (4.9 s / 40 yards)
T = 11.76 s, total time ran by Chris Gilbert