Explain the fundamental equivalence of valuation based on expected future dividends free cash flows and earnings

Q: What is the dividend payout ratio and the dividend yield ratio?

A: Dividend payout ratio is the ratio between total dividends and the net income of a company. It helps…

Q: The internal rate of return (IRR) is The same thing as the cost of capital. The discount rate that…

A: IRR is the internal rate of return. It is the rate at which net present value is equal to zero.…

Q: What are the factors favoring a high-dividend policy?

A: Dividend refers to portion of net earnings of the company that is shared with common stock holders…

Q: In comparison to free cash flow valuation, what's the main issue with dividend valuation?

A: Dividend discount model is a DCF model which assumes that the price of a stock should be equal to…

Q: Define the term Return on common equity?

A:

Q: a) What is the purpose of internal earnings targets? (b) What is the risk associated with internal…

A: ‘’Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: What are the consideration that need for dividend pay out policy?

A: The dividend is referred to as the share of profits, which used to be distributed to the company's…

Q: The gain or loss on the net monetary position in a hyperinflationary economy shall be included in:…

A: This question is answered according to IAS 29 "Financial Reporting in Hyperinflationary Economies"

Q: Concerning the actual dividend paid that can be used as an input to the dividend discount model…

A: Financing section of the cash flow statement includes the outflow and inflow of cash in relation to…

Q: How to analysis the Liquidity in Finacial Market analysis?

A: Liquidity is the availability of the current assets to fulfill the current liabilities of the…

Q: discuss the respective theorists, their arguments against and for dividend policies

A: Firm issued various securities to arrange the fund for the business and pay return on it. Dividend…

Q: Which one of the following is most closely related to the net present value profile? A: Payback B:…

A: The net present value method is used to evaluate the investment projects. We can evaluate the…

Q: When is a gain or a loss from a cash flow hedge reported in earnings?

A: Cash flow hedge: If a company uses any derivative to cover the risk due to cash flow changes to…

Q: Describe the concept of present-worth analysis based on cash flow equivalence?

A: It is the equivalence analysis method under which cash flows of projects are being discounted to a…

Q: Describe the annual cash flow analysis, which presents measures of investment worth based on yield?

A: The question is based on the concept of cash flow and its analysis in terms of discounted value of…

Q: Define each of the following terms: g. Repatriation of earnings; political risk

A: Repatriation means the conversion to a single domestic currency of any foreign currency.…

Q: What is the difference between-1 accounting and Finance? answer this ?question with suitable example…

A: The difference between accounting and finance is as follows:

Q: describe valuation using free cash flows for all debt and equity stakeholders as well as free cash…

A: Free cash flow valuation is a technique used to determine the intrinsic value of a firm which…

Q: Define DCF (discounted cash flow) analysis

A: Discounting cashflow

Q: Define dividend yield

A: Introduction: Usually, dividend is nothing but a distribution of a portion of profits of the…

Q: Define capital gains yield

A: Capital gain yield in finance is an important concept because it helps the investors to know the…

Q: How would discounted cash flow be applied to fair vaue valuations?

A: Valuation of a company means to determine the intrinsic value of a company or the value which the…

Q: Explain how to use the free cash flow valuation model to find the price per share of common equity

A: Free cash flow to the firm is the cash flow available to the company’s suppliers of capital after…

Q: Which one of the following represents the capital gains yield as used in the dividend growth model?

A: The formula for the dividend growth model is: P0 = d1/(r-g) where d1 is the next expected dividend r…

Q: what is the return asset that is used in financial statement analysis?

A: Here in this case we need to understand the meaning of return on asset ratio of financial statement…

Q: Whats is the sum of the expected dividend and the capital gains yield called

A: total yield = capital yield + dividend yield

Q: period

A: value of equity is the sum of present value of future dividend paid. Present value = Expected…

Q: thod of income approach that consider the factor

A: Introduction: When valuing a property that generates a source of income, the income technique is…

Q: What factor should be kept in mind while deciding a dividend policy

A: A dividend policy is an important policy of the corporate entity which is used to structure the…

Q: Describe how volatile the payout ratios are based on earnings and cash flows.

A: Dividends payout ratio can be defined as the paying out the dividends to its shareholders on the…

Q: How are financing costs and dividends considered in Scenario Analysis?

A: Net present value (NPV) is computed by subtracting present value of cash outflows from the present…

Q: The two main approaches to equity analysis are the relative valuation models and… a. The discounted…

A: Stock valuation is very useful to ascertain whether the stock is trading at premium or discount.…

Q: Explain how to estimate the price per share using the free cashflow valuation model.

A: Free cash flow valuation model is the one in which company’s cash flows that are expected to occur…

Q: Should stockholder wealth maximization be thought of as a long-term goal or a short-term goa

A: Answer: The stockholders are the investors in the public company that is an open company. The…

Q: Which of the following may take the form of dividend income and/or capital appreciation?   a. bond…

A: Dividend means amount of income that is generated and distributed to the shareholders. Capital…

Q: Discuss how the concept rbitrage profit help estab- um in capital markets. Di:

A: The equilibrium of the stock market involves setting market prices such that supply equals demand…

Q: Discuss the two variables that must be considered whether you are using the present value of cash…

A: The discounted cash flow approach and the relative valuation approach are both used to value any…

Q: Discuss why the present value of cash flows and the relative valuation ratios valuation approaches…

A: Valuation of entity is done in two methods as: Discounting expected inflows from entity in upcoming…

Q: How is the CAPM (Capital Asset Pricing Model) related to valuation?

A: The relationship between systematic risk and expected return on assets, particularly equities, is…

Q: What is Capital Asset Pricing and is it better then Dividend Valuation Model? If yes, on what…

A: The capital asset pricing model is an extension of the portfolio theory of Markowitz. It derives the…

Q: Illustrate the concept of present-worth analysis based on cash flowequivalence along with the…

A: The concept of present-worth analysis based on cash flow equivalence along with the payback period.…

Q: Would you expect positive covariances of returns between different types of assets such as returns…

A: Covariance is the measure of the degree to which two variables move together relative to their…

Q: how would you value the assets, liabilites and equity and stock values ?

A: Assets valuation is the way of  deciding the reasonable market or present estimation of resources,…

Q: Liquidity. The net profit / sales percentage measures which of the following? O Return on…

A: Ratio analysis: The analysis of a company using the financial ratios and comparing its trends and…