analyst is trying to determine the intrinsic value of a certain share. Which of the following is true with regards to the methods of stock valuation? a. Discounting techniques does not involve forecasting future dividends b. Free cash flow is important in discounted dividend model c. Aside from the intrinsic value, the market value of the firm can also be determined by free cash flow model d. Non-constant growth stock is valuated in the same way as preferred stock

Q: Bulldogs Inc. has Dog bonds outstanding with P1,500 face value and 8 years is remaining before its m...

A: Callable bonds are those bonds which can be bought back by the issuer at a predetermined date before...

Q: . A one-month European put option on a non-dividend stock is currently selling for 2.50$. The stock ...

A: An European put option can only be exercised on its maturity. It is a kind of derivative option that...

Q: culate the required rate of return for Campbell Corp. common stock. The stock has a beta of 1.3, and...

A: The minimum profit (return) that an investor must seek or obtain in exchange for taking on the risk ...

Q: 13. Christopher Flores borowed a certain principal from bank with interest at 7% per annum. After 3....

A: Since specifically solution to Question 13 is asked, so the given solution is for Question 13. Solut...

Q: For each of the following pairs of Treasury securities (each with $1,000 par value), an identity whi...

A: a) For A three-year zero-coupon bond or a five-year zero-coupon bond: Current Price= Face Value(1+Di...

Q: A five year P1,000 par value bond pays a 5% annual coupon. Given a YTM of 7%, what is the price of t...

A: The price of bond will be the present value of all coupon payment and present value of face value. B...

Q: Red Company's comparative balance sheet shows the following: P10,000 increase in accounts receivable...

A: Net income = P 100000 Increase in accounts receivables = P 10000 Increase in inventories = P 10000 I...

Q: A firm produces 550 T.V. sets during its first year. The sum total of the imm's production at the en...

A: Given Output for first year is 550 Sum of output at the end of 5 years is 3000.

Q: ny has a financial break-even point at P163,500. How much is the total preferred dividends to be dis...

A: Financial break even point is a point where earning per share of the entity is equal to zero.

Q: Weekly (Feb 21-27) Projected Actual Difference Food Cost $6,971 $7,842 +$871 (over) Beverage Cost $3...

A: Solution:- Labour cost is the cost incurred on salaries, wages and other expenses relating to worker...

Q: 4. Your father entrusts you with the funds for your college education. He gave you two options: a) r...

A: Details of Ques-4: First Offer is P200,000 now Second Offer is P500,000 ten year from now Required R...

Q: PROBLEM: If Php 6,000 must accumulate for 12 years at 12 % compounded quarterly, then find the compo...

A: Investment amount (PV) = 6000 Period = 12 Years Quarterly period (n) = 12*4 = 48 Interest rate = 12%...

Q: A growing business moved to a new building to service a bigger client pool. The building acquired th...

A: Cost of Building is ₱3,000,000 Interest Rate is 12% Time Period is 5 years Compounding Period is Mon...

Q: A firm's current ratio has steadily increased over the past 5 years, from 1.9 to 3.8. What would a f...

A: Current ratio measures the liquidity  which is calculated by dividing current assets by its current ...

Q: The Black-Scholes model is used by Bulldogs Inc. to value call options on the stock of National Inc....

A: Black Scholes Model is one of the mathematical model which is used for calculating value of put and ...

Q: The following data are gathered for: · The real risk-free rate is 1.25% · Inflation premium is const...

A: Real risk free rate (A) = 1.25% Inflation premium (B) = 2.50% Default risk premium (C) = 5% Liquidit...

Q: Consider the following information given to > answer the series of questions below to determine the ...

A: Solution:- We know, expected rate of return in case of data (ie. Which involves probability) is the ...

Q: 4. Best Flight Inc. is considering three mutually exclusive alternatives for implementing an automat...

A: To evaluate which alternative to be chosen, it is required to calculate the NPV of the different alt...

Q: 11. A debt of P29,000 bears simple interest at 7½% per annum. If it is repaid after 5 years, how muc...

A: Since you have asked multiple question, we will solve the first question for you. If you want any sp...

Q: Describe payday loans, tax-refund advances and structured-settlement advances—the  differences betwe...

A: Payday loans are also sometimes known as cash advances. These are unsecured loans with maturity peri...

Q: 1.) The option is currently a.) In-the-money b.) At-the-money c.) Out-the-money 2.) In/At/Out- t...

A: Put option is the option which gives the right to its buyer to sell the underlying security at prede...

Q: Red Company financing has a total assets of P500,000 and total liabilities of P300,000 at the end of...

A: The company has limited liability which means the shareholders are liable to the extent of contribut...

Q: 12. Tony's Towing borrows $17,250, at 7.5% interest, for 320 days. If the bank uses the exact intere...

A: Solution:- When an amount is borrowed from bank, bank charges interest on it. In exact interest meth...

Q: Frank is a construction worker at construction company C in Saskatoon. Frank has a workplace acciden...

A: Insurance refers to the protection agreement which can be purchased by a person to control or elimin...

Q: What is the required rate of return of the portfolio held by Bulldogs Inc. if the nominal rate of th...

A: Shares Investment Beta BDO 210000 2 TEL 90000 2 SMC 300000 1   Risk free rate = 2.25% Marke...

Q: Bulldogs Inc. 4-year long-term bonds currently yield 11%.  The real risk-free rate is 3%.  The matur...

A: Bond yield is the amount an investor realise on bond. It does consider various factors such as infla...

Q: Red Company has total interest charges of $10,000 per year, sales of $1 million, a tax rate of 40 pe...

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Q: gage debt service ratio? O 70.27% O 62.51% O 90.25% O 56.41%

A: Mortgage debt services ratio is quite extensively used in granting the mortgage loans. That show pay...

Q: A manager buys three shares of stock today, and then sells one of those shares each year for the nex...

A: Let R1, R2 and R3 be the returns for year 1, 2 and 3  

Q: Halliford Corporation expects to have earnings this coming year of $3.19 per share. Halliford plans ...

A: This is one of the most popular methods for valuation of price of stock by discounting all the futur...

Q: Sid has made deposits of 960 at the end of every 6 months for five years. If interest is 5% compound...

A: Compound interest refers to the interest which is earned on the amount of interest itself. The conce...

Q: Bulldogs Inc. has sales of P4,500,000, variable costs equal 75% of sales, and a fixed interest costs...

A: Sales = P4,500,000 Variable cost = 75% Contribution = Sales*(1-Variable cost ratio)                 ...

Q: All are items that can minimise credit risk, except. Guarantor  Mortagage Collateral  Pledge

A: Firms use credit risk mitigation to reduce the credit risk associated with an exposure. Credit risk ...

Q: Dorpac Corporation has a dividend yield of 2.3%. ​Dorpac's equity cost of capital is 8.2%​, and its ...

A: The Gordon growth model states that the stock price can be calculated by discounting all the future ...

Q: 4. Use MV = P(1 + RT) to find the maturity value (in $) of the loan. Principal Rate (%) Time Maturi...

A: The maturity value is calculated as sum of principal and interest earned

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A: Loan amortization refers to a schedule which is prepared to shows the periodic loan payments, amount...

Q: What nominal rate compounded semi-annually yields the same amount as 20 % compounded quarterly?

A: Given rate (r) = 20% quarterly compounded (Compounding frequency = 4) Let i = Nominal rate compounde...

Q: Based on this information, the breakeven points for Bulldogs Co. and National Co. are:   a. 5 millio...

A: Breakeven point is that level of sales revenue at which business is only recovering it's fixed costs...

Q: The potential loss because of damage to the insured equipment is a function of the value of the equi...

A: Potential Loss means the loss suffered due to damages that are accidental in nature like earthquake,...

Q: How much must Melissa deposit at the beginning of every three months for 5 years into an account at ...

A: Solution:- When an equal amount is deposited each period at the beginning of each period, it is call...

Q: Suppose that you earn $39,600 per year. What is your monthly salary? 3300 Assume that you deposit 10...

A: Monthly salary = $39600 / 12 = $3300 Monthly deposit (D) = 10% of $3300 = $330 r = 4.3% per annum = ...

Q: Bulldogs Inc. forecasted the following data for 2022. ·      Forecasted unit sales is 20,000. ·    ...

A: Given: Particulars Amount Sales units 20000 Selling price 25 Contribution margin ratio 40% ...

Q: Determine the maturity date of the loan (not in a leap-year). Loan Date Time of Loan (days) Maturit...

A: Loan date = Feb 8 Loan duration = 110 days As it is not a leap year, Feb has 28 days

Q: A man bought a condominium unit worth ₱3.9M a pay a down payment of ₱1.5M and agreed to pay the rema...

A: Present value of future value of money to be received in future is value of money without the intere...

Q: If the market value of your home is $250000, but the replacement cost of the structure is $190000, h...

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

Q: 5. Portfolio Beta Portfolio beta can be computed in the same way as portfolio return was computed. I...

A: Beta is used in determining the risk premium to be expected from investment made in a asset because ...

Q: Find the C.I of the following when P= $10,000, r =6% and n = 10 years

A: Note: This post has two distinct questions. The first has been answered below.

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A: Here,   Project A Project B   Project C   Projected cash outflow        Net initial investm...

Q: 8. A store manager obtained a loan of $45,000, at  6 3 8%  interest, for 14 months to purchase supp...

A: The simple interest is simply calculated as product of principal rate and time

Stock Yields

The stock yield is otherwise known as the dividend yield. The dividend yield is an annual payment of the stock dividends to the holder of a firm’s stock. The dividend yield is a financial ratio to measure the value of dividend payout every year for the relative stock price. The yield of a stock is usually shown in a percentage that discloses the expected future earnings from stock depending on the current stock price in the future. Stock yield will change depending on the market fluctuations and in accordance with the market fluctuations, the dividends will be increased or decreased by the firm.