Find the intrinsic value of XYZ Inc. The DPS at the end of year 1 is $2.00; at the end of year 2 is $2.40; at the end of year 3 is $2.70. After the third year, the DPS grows at a constant rate of 5%. The required rate of return is 12%.

Answers

Answer 1

Answer: 34.33

Explanation:

Firstly, we'll calculate the terminal value

which willl be:

= 2.70 × (1+5%)/(12% - 5%)

= 2.70 x 1.05/(0.12 - 0.05)

= 40.5

Then, the intrinsic value will be:

= 2/1.12 + 2.4/1.12² + (2.7 + 40.5)/1.12³

= 34.33

Therefore, the the intrinsic value of XYZ Inc is 34.33


Related Questions

A property line conflict between neighbors Prakhash and Elliott escalated as the years went on. The police were called frequently to deal with loud arguments and acts of vandalism between the two until Officer Graves referred them to a community mediation center. In the two weeks since the mediation, the number of calls to police had dropped. Officer Graves contacted Martin, the mediator, and asked if she should consider the conflict resolved. Martin replied that the parties had agreed to meet again for another mediation session, but that the matter of the property line remained a point of tension.

Answers

The next day, Graves called the mediation center to tell Martin that Prakhash and Elliott had had a physical altercation, and both were charged with assault.

Which of the following best describes the status of the conflict now?

a) the conflict was resolved

b) the conflict is in the post-conflict stage

c) the conflict re-escalated

d) the conflict de-escalated

The answer to this question is that the conflict re-escalated

A conflict can be described as a very serious disagreement on ideas or interests that can linger on for a long period of time if not resolved.

Re-escalation means that the conflict started to get very serious again even after a mediator stepped in.

Because a mediator party had already stepped into the case and they were already trying to resolve issues, a physical altercation means that it re-escalated.

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Michael's Mattress Warehouse is planning to hire a new sales representative , so Sarak interviewing the sales manager to leam more about the skills, responsibilities, and behaviors associated with the positionAfter the interview, Sarah will observe one of the present sales representatives doing his job to get an even better idea of what the job involves Once she is done, she will use the informaation gathered to write a job description for the opes position Based on Sarah's actions , we can conclude that she is conducting a

compensation classification job analysis
employment comparison performance appraisal

Answers

From what Sarah is doing we can conclude that she is performing a job analysis.

Given that she is observing and trying to learn about requirements of this job.

When performing a job analysis, the analyst is trying to get relevant information about the details of a job as well as the requirements of the job.

Job analysis are carried out most of the time to determine job placements.

In conclusion We can see this from what Sarah is doing, she is observing and asking questions on what the job entails in order to write a description for the job.

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All That Blooms provides environmentally friendly lawn services for homeowners. Its operating costs are as follows.
Depreciation $1,224 per month
Advertising $153 per month
Insurance $1,683 per month
Weed and feed materials $10 per lawn
Direct labor $8 per lawn
Fuel $2 per lawn
All That Blooms charges $50 per treatment for the average single-family lawn.
Determine the company

Answers

Answer and Explanation:

The computation is shown below:

Total fixed costs is

= depreciation + advertising + insurance

= 1224 + 153 + 1683

= $3060 per month

Now  

Total variable cost per unit

= weed + direct labor + fuel

= 10 + 8 + 2

= $20/ per lawn

Now  

Contribution margin ratio = (sales per unit - variable cost per unit) ÷ sales per unit

= ($50 - $20) ÷ 50

= 60%

Now

Breakeven sales is

= fixed costs ÷ contribution margin ratio

= $3,060 ÷ 60%

= $5100

And,

Breakeven sales units is

= breakeven sales ÷ sales per unit

= 5100 ÷ 50

= 102 lawns

A price-cutting tactic may backfire if

Answers

Need answer choices

Two national companies both sell a variety of soaps and lotions. When looking at the balance sheets, one company lists goodwill as an asset, but the other company does not. What does this tell you about these companies

Answers

Answer: A. The first company purchased an entire business to expand the company, whereas the second company likely has not yet purchased another entire business.

Explanation:

Goodwill is the value over a company's net value that it is purchased for. For instance, if a company is worth $15,000 but was purchased for $20,000, $5,000 is the goodwill.

A company only expresses goodwill in its books when it has purchased another company for more than the company's value and when the balance sheets of the purchaser and the purchased were consolidated, the goodwill is therefore shown.

If the first company has goodwill as an asset then it means that it has purchased a company before unlike the second company which has not purchased any company as of yet.

Goodwill is referred to as intangible assets and is associated with the reputation of the firm. The goodwill depends on the gradual growth of the company at the variable stages. It is the purchase or acquisition of the assets at fair value and acquiring limited liabilities for the better growth of the company.

The correct option for the answer is A. The first company purchased an entire business to expand the company, whereas the second company likely has not yet purchased another entire business.

Options A. The first company purchased an entire business to expand the company, whereas the second company likely has not yet purchased another entire business is correct because the first company has made the decision to expand by owning it and getting some of the major investors from the market for the investment as well.  

Options:

B. The first company regularly donates to charitable causes, whereas the second company does not donate to charitable causes.

C. The first company purchased patents above market value to expand their product line, whereas the second company likely developed all of their patents in-house.

D. The first company added research and development costs as an intangible asset, whereas the second company expensed their research and development costs immediately

These options are wrong because they do not specify the correct meaning of the sentence in the context. They are verifying the other concept as compared to the context.

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Recessions in China and India would cause:________
a. the U.S. price level to fall and real GDP to rise.
b. the U.S. price level to rise and real GDP to fall.
c. the U.S. price level and real GDP to fall.
d. the U.S. price level and real GDP to rise.

Answers

Answer:

b. the U.S. price level to rise and real GDP to fall.

Explanation:

A recession can be regarded as macroeconomic term which is used to describe significant decline that occur in general economic activity within a designated region. It can be regarded as economic decline of two consecutive quarters which is been reflected by GDP along with some monthly indicators, this indicators could be a rise in unemployment.

For, instance Recessions in China and India would cause the U.S. price level to rise and real GDP to fall.

A new trailer worth $10,000 is purchased and it's expected that the salvage value after 13 years will be $480. If the annual interest rate is 4.20% , what equation would be appropriate to use to determine the Expected Uniform Annual Cost (EUAC)

Answers

The equation that is used to determine the Expected Uniform Annual Cost is :

[tex]$A = P(A/P, i,n) - F(A/F, i,n)$[/tex]

It is given that :

Purchased price of a new trailer = $ 10,000

Number of years = 13 years

The salvage value after 13 years = $480

The rate of interest annually = 4.20%

The Estimated Uniform Annual Cost, that is the EUAC method is used to express the life cycle costs as the annualized estimate of the cash flow rather than a lumpsum estimate of the present value.

In other words, it is the annual cost of a system which is equal or equivalent to the discounted total cost.

So the equation that can be used to express the Expected Uniform Annual Cost in the given problem is :

[tex]$A = P(A/P, i,n) - F(A/F, i,n)$[/tex]

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Which one of the following is NOT included in the Marketing Mix?
Select one:
a. Promotion
b. Product
c. Distribution
d. Price
e. Personalization

Answers

C : Distribution is not included in the marketing mix

C . Or E. Distribution or personalization

When a company receives payment from a customer whose account receivable was previously written off, the company a. reinstates the customer's account to the balance of both gross receivables and the allowance. b. records a decrease in bad debt expense. c. records an increase in net revenue. d. records a gain from unexpected collections.

Answers

Answer:  a. reinstates the customer's account to the balance of both gross receivables and the allowance.

Explanation:

When a company receives payment from a customer whose debt had been written off, the first step is to reinstate the account. This will be done by debiting the Accounts Receivable account and crediting the Allowance for doubtful debt accounts.

The accounts receivable account will then be credited to show that it is reducing. The cash account will be debited to show that cash was received from the customer.

A company's flexible budget for 12,000 units of production showed total contribution margin of $24,000 and fixed costs, $16,000. The operating income expected if the company produces and sells 15,000 units is:________
a) $34,000.
b) $10,000.
c) $18,667.
d) $8,000.
e) $14,000.

Answers

Answer:

e. $14,000

Explanation:

Operating income for 15,000 units = Proportionate contribution - Fixed cost

Operating income for 15,000 units = [($24,000/12,000)*15,000] - $16,000

Operating income for 15,000 units = $30,000 - $16,000

Operating income for 15,000 units = $14,000

So, the operating income expected if the company produces and sells 15,000 units is $14,000.

A lower inflation rate will decrease the after-tax real interest rate when the government taxes nominal interest income.

a. True
b. False

Answers

False, SHOULD INCREASE after-tax real interest rates.

Emma's Electronics Incorporated has total assets of $56 and total debt of $43 million. The company also has operating profits of $27 million with interest expenses of $8 million.

Required:
a. What is Emma's debt ratio?
b. What is Emma's times interest earned?
c. Based on the information above, would you recommend to Emma's management that the firm is in a strong enough position to assume more debt and increase interest expense to $10 million?

Answers

Answer:

a. Debt Ratio = Debt / Total Assets

Debt Ratio = $43 million / $56 million

Debt Ratio = 0.76786

Debt Ratio = 76.79%

b. Time Interest Earned = EBIT / Interest

Time Interest Earned = $27 million / $8 million

Time Interest Earned = 3.375 times

c.  If Interest expense is increased to 10 lmillion. The new Time Interest Earned = $27 million / $10 million = 2.7 times. The new time Interest Earned is at 3 times and this indicate that the company can easily raise more debt for its funding needs.

Identify a key concept or foundational theory from the first four weeks of class and in half a page discuss how it applies to your current work environment or a recent social, political or business event. Include the chapter and sub topic from your textbook. g

Answers

Answer:

TQM

Explanation:

TQM concept we learned about in the first few weeks of class. For TQM to get successful, all workers need to get involved. One great practice that TQM uses is decision-making as a group.  This process promotes an open conversation with productivity as people sheltering their opinions.

application of the principle of comparative advantage leads to

Answers

Answer:

proper allocation of time and resources.

Explanation:

Fair and successful trade.

Refer to the supply and demand data for a certain elective surgical procedure. Without health insurance, the equilibrium price and quantity would be: Group of answer choices $3,000 and 7,000. $2,000 and 11,000. $5,000 and 2,000. $4,000 and 4,000.

Answers

Answer:

$3,000 and 7,000

Explanation:

Please find attached the table used in answering this question

Equilibrium price is the price at which quantity demand equal quantity supplied.

Equilibrium quantity is the quantity that equates  quantity demand with quantity supplied.

Above equilibrium price there is a surplus - quantity supplied exceeds quantity demanded. As a result of the surplus, price would fall until equilibrium is reached.

Below equilibrium price there is a shortage - quantity demanded exceeds quantity supplied. As a result of the shortage, price would rise until equilibrium is reached

Draus Products Company uses activity-based costing to compute product costs for external reports. The company has three activity cost pools and applies overhead using predetermined overhead rates for each activity cost pool. Estimated costs and activities for the current year are presented below for the three activity cost pools.
Estimated Overhead Cost Expected Activity
Activity #1 $60,048 4,800
Activity #2 $58,656 2,400
Activity #3 $130,324 4,400
Actual costs and activities for the current year were as follows.
Actual Overhead Cost Actual Activity
Activity #1 $59,798 4,830
Activity #2 $58,476 2,370
Activity #3 $130,234 4,450
The total amount of the debits to the manufacturing overhead during the year was closest to:__________.
a. $248,508.
b. $248,988.
c. $250,334.
d. $251,110.

Answers

Answer:

a. $248,508.

Explanation:

The calculation of the total amount of the debits to the manufacturing overhead during the year is given below:

Total Amount of Debits should be

= Actual Overhead Cost

= $59,898 + $58,476 + $130,324

= $248,508

Hence, the total amount of the debits to the manufacturing overhead during the year is $248,508

Therefore the correct option is a.

Which of the following statements is not true of person-organization fit? Multiple Choice those who experience a higher fit have higher levels of job satisfaction employees who fit well have more trust in their managers the company can expect a committed worker when there is good person-organization fit a good fit means less stress about day-to-day tasks those with a good fit experience higher task performance than those without a good fit

Answers

The statement " those having a good fit experience have the higher task performance as compared to those who don't have a good fit" is correct.

The following information regarding the person-organization fit is:

It is a theory where the organization and the employee should be compatible with each other. In this, both parties should have the same attributes.

Due to the above reasons, the person-organization fit does not relate to the employee task performance.

Therefore all other options are not considered as all other options are relevant for the person-organization fit.

Thus, we can conclude that the statement " those having a good fit experience have the higher task performance as compared to those who don't have a good fit" is correct.

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What should Yelk set as the direct labor rate per hour?

Answers

Explanation:

30%

hope so it helps you

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__________ is a risk-based strategic assessment and planning technique used primarily for security but which also can be used for disaster recovery planning purposes.

Answers

Answer: Octave risk assessment

Explanation:

Operationally Critical Threat, Asset, and Vulnerability Evaluation (OCTAVE) risk assessment is is simply a self-directed approach whereby the employees in an organization take responsibility and set up the security strategy of the organization.

It's a risk-based strategic assessment and planning technique used primarily for security but which also can be used for disaster recovery planning purposes. In this case, with the knowledge of the employees, the team defines the state of security in the organization, identify the risks and then sets a security strategy.

Question 4 of 10
Which situation best illustrates the process of capital formation?
O A. A farmer increases his profits by growing a variety of new crops.
B. An artist buys bonds that will increase in value over time.
C. An engineer tries to limit her spending during the week.
O D. A factory worker takes out a high-interest loan to buy a new home.
SUBMIT

Answers

Answer:

I think it is B

Explanation:

Answer:

an artist buys bondss that will increase in value over time.

Explanation:

took the test. UwU

MC Qu. 54 Maxim manufactures a hamster food product... Maxim manufactures a hamster food product called Green Health. Maxim currently has 10,000 bags of Green Health on hand. The variable production costs per bag are $3.60 and total fixed costs are $10,000. The hamster food can be sold as it is for $8.95 per bag or be processed further into Premium Green and Green Deluxe at an additional $2,200 cost. The additional processing will yield 10,000 bags of Premium Green and 3,200 bags of Green Deluxe, which can be sold for $7.95 and $5.95 per bag, respectively. The net advantage (incremental income) of processing Green Health further into Premium Green and Green Deluxe would be:

Answers

Answer:

Maxim

The net advantage (incremental income) of processing Green Health further into Premium Green and Green Deluxe would be:

= $6,840.

Explanation:

a) Data and Calculations:

Inventory of Green Health = 10,000 bags

Production costs per bag = $3.60

Total variable costs = $36,000 (10,000 * $3.60)

Total fixed costs = $10,000

Total production costs = $46,000 ($36,000 + $10,000)

Selling price before further processing = $8.95 per bag

Total revenue from selling 10,000 bags = $89,500 (10,000 * $8.95)

Additional processing cost = $2,200

Total revenue from selling 10,000 bags of Premium Green and 3,200 bags of Green Deluxe:

Premium Green (10,000 * $7.95) = $79,500

Green Deluxe (3,200 * $5,95) =        19,040

Total revenue =                               $98,540

Less additional processing costs      (2,200)

Net revenue from further processing $96,340

Net advantage of further processing = $6,840 ($96,340 - $89,500)

Exercise 9-4 Interest-bearing notes payable with year-end adjustments LO P1 Keesha Co. borrows $145,000 cash on December 1 of the current year by signing a 90-day, 9%, $145,000 note. 1. On what date does this note mature? 2. & 3. What is the amount of interest expense in the current year and the following year from this note? 4. Prepare journal entries to record (a) issuance of the note, (b) accrual of interest on December 31, and (c) payment of the note at maturity.

Answers

Answer:

Keesha Co.

1. The date on which this note matures is February 28.

2. Interest expense for the current year is:

= $1,108

3. Interest expense for the following year is:

= $2,109

4. Journal Entries:

December 1:

Debit Cash $145,000

Credit Notes Payable $145,000

a) To record the issuance of the 90-day, 9% notes payable.

December 31:

Debit Interest Expense $1,108

Credit Interest Payable $1,108

b) To accrue interest expense.

February 28:

Debit Notes Payable $145,000

Debit Interest Payable $1,108

Debit Interest Expense $2,109

Credit Cash $148,217

To record the payment of the note at maturity.

Explanation:

a) Data and Calculations:

Notes Payable on December 1 = $145,000

Interest rate on the note = 9%

Duration of note = 90 days

December 1

Plus 90 days

= February 28

Interest expense for the current year = $1,108 ($145,000 * 9% * 31/365)

Interest expense for the following year = $2,109 ($145,000 * 9% * 59/365)

Analysis:

December 1:

Cash $145,000

Notes Payable $145,000

December 31:

Interest Expense $1,108

Interest Payable $1,108

February 28:

Notes Payable $145,000

Interest Payable $1,108

Interest Expense $2,109

Cash $148,217

Assume that Zonk is a potential leveraged buyout candidate. Assume that the buyer intends to put in place a capital structure that has 70 percent debt with a pretax borrowing cost of 14 percent and 30 percent common equity. Compute the weighted average cost of capital for Zonk based on the new capital structure.
A. 8.85%.
B. 12.56%.
C. 13.01%.
D. 9.94%.

Answers

Answer:

A.8.85%

Explanation:

Computation to determine the weighted average cost of capital for Zonk based on the new capital structure.

First step is to calculate the Cost of equity capital using this formula

Cost of equity capital = Risk free rate + (Beta*Market premium)

Let plug in the formula

Cost of equity capital = 2.3% + (1.13*5.3%)

Cost of equity capital=8.28%

Now let determine theWeighted average cost capital

Weighted average cost capital = [.70*.14*(1-.35)]+(.30*.0828)

Weighted average cost capital= [.70*.14*.65]+.02484

Weighted average cost capital=0.0637+.02484

Weighted average cost capital= .0885*100

Weighted average cost capital= 8.85%

Therefore the weighted average cost of capital for Zonk based on the new capital structure is 8.85%

In the small country of Economerica, there are 6 thousand people employed, 1 thousand people unemployed, and 3 thousand people of working age not included in the labor force. One thousand students graduate from the university and seek jobs in the country, but not one graduate is able to find one. Half of the new graduates believe there is no chance of finding a job and return home to live with their parents. Ceteris Paribus, what would the new unemployment rate be in Economerica?
A. 14.29%
B. 20.00%
C. 25.00%
D. 45.45%

Answers

Answer: B. 20.00%

Explanation:

Unemployment rate does not include those who have given up on finding a job.

Unemployment rate = Unemployed people / Labor force

Unemployed people:

= Original unemployed + half the new graduates

= 1,000 + (1,000 / 2)

= 1,500 people

Labor force:

= Unemployed + employed people

= 1,500 + 6,000

= 7,500 people

Unemployment rate:

= 1,500 / 7,500

= 20%

Refer to Exhibit 16.6, which reflects the relationship between the inflation rate and the unemployment rate. If the economy started near point b and government purchases increased, we would expect the economy in the short run to move to _____

Answers

Answer: Point C

Explanation:

When government purchases increases, there will be more money in the economy which will have a multiplier effect in the economy of increasing investment and consumption spending both of which will lead to new companies being founded and old companies increasing capacity.

The unemployment rate will therefore decrease as more people are hired to boost capacity but the inflation rate will increase because of the rise in demand. The only point on the graph that shows these two things in point c so that is where the economy will move to in the short run.

difference between price consumption curve and income consumption curve​

Answers

Answer:

Price-consumption curve is a graph that shows how a consumer's consumption choices change when price of one of the goods changes. Income-consumption curve is a similar graph which traces changes in demand in response to changes in income.

Bluegill Company sells 14,000 units at $240 per unit. Fixed costs are $168,000, and operating income is $1,176,000. Determine the following:
a. Variable cost per unit.
b. Unit contribution margin.
c. Contribution margin ratio.

Answers

Answer:

a. Variable cost per unit:

= (Sales - Fixed costs - Operating income) / number of units sold

= ((14,000 units * 240) - 168,000 - 1,176,000) / 14,000

= 2,016,000 / 14,000

= $144 per unit

b. Unit contribution margin:

= Selling price - Variable cost per unit

= 240 - 144

= $96

c. Contribution margin ratio:

= Unit contribution margin / Selling price

= 96 / 240

= 40%

A stock has an expected return of 11.85 percent, its beta is 1.08, and the risk-free rate is 3.9 percent. What must the expected return on the market be

Answers

Answer:

11.26%

Explanation:

According to the capital asset price model: Expected rate of return = risk free + beta x (market rate of return - risk free rate of return)

rm = expected return on the market

11.85 = 3.9 + 1.08(rm - 3.9)

11.85 - 3.9 =  1.08(rm - 3.9)

7.95 = 1.08(rm - 3.9)

7.95 / 1.08 = rm - 3.9

7.361 = rm - 3.9

rm = 11.26

As more units of an item are purchased, everything else equal, marginal satisfaction from consuming additional units will tend to Select one: a. decrease at the same rate for all consumers. b. decrease but at different rates for different people. c. increase at the same rate for all consumers. d. increase but at a decreasing rate for all consumers.

Answers

Answer:

b

Explanation:

Marginal satisfaction is the additional satisfaction received from consuming an additional unit of a good or service. It is the change in total satisfaction by increasing the quantity consumed by one unit

Marginal satisfaction usually declines as more units of the products is consumed

An example illustrating diminishing marginal satisfaction.

Imagine a traveller arriving from the desert where he hadn't had a drink of water in days .he is offered his first glass of water. the first cup of water he drinks would give him the highest utility. As more and more cups of water is drank, marginal utility decreases. At the point where he is fully satisfied, he stops drinking water and marginal utility becomes zero.

the decrease in marginal satisfaction of this traveller would be slower than the decrease in marginal satisfaction of a person working in an air conditioned office with easy assess to water

Name any two professional training needed in profession.

Answers

1. learner management system and environment.

2. implications for pedagogy and application to resource poor environment.

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