Did you use the same discount rate in the FCF vs DDM model? If so, why? If not, why not?

Q: How is the risk-adjusted discount-rate approach more commonly practiced in the real world?

A: Risk adjusted discount rate approach is an approach which is used in assessment of various long-term…

Q: What are the two types of discounts?

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Q: Define vector error correction model for the two interest rates?

A: Vector correlation model is used to determine the direction of causality between two variables if…

Q: WHAT IS THE VALUE OF DISCOUNTED FLOWS

A: As per Time value of money, there are present values as well as future values.

Q: Describe the method of Payback Screening?

A: Answer: The company has several investment opportunities. It is vital that you opt for the right…

Q: What is the basis for the discount rate in a DCF analysis? Describe how this rate mightbe estimated.

A: Basis of discount rate in DCF analysis is to compute the PVF of future Cash Flows expected as it is…

Q: Explain HPRs and Inflation?

A: Answer: Holding period returns (HPRs): Holding period return (HPR) is one of the investment…

Q: What three flaws does the regular payback have? Does the discounted payback correctall of these…

A: Three flaws of payback period: 1. Time value of money concept is ignored by the payback period. 2.…

Q: Describe the strengths and weakness of payback method.

A: Definition:   Payback method: Payback method refers to the method which measures the time period…

Q: What is the discounted-payback method?

A: Payback period states the number of years that is taken by the project to recover the investment of…

Q: The W.A.C.C. is a :  a Composite opportunity cost metric  b Simple opportunity cost metric  c…

A: The overall cost of capital, also known as the Weighted average cost of capital (WACC), is the…

Q: Describe in detail the Stochastic Discount Factor (SDF)and its components.

A: Stochastic discount factor is defined as the concept, which has the combination of the financial…

Q: How can we obtain an equal-payment series equivalent to the gradient series?

A: The question is based on the concept of gradient series of payments, which is used in equivalent…

Q: What makes the risk-adjusted discount rate approach appealing?

A: Answer: The approximation of the present cash value for high risk assets is called adjusted discount…

Q: What is discounting and compounding? What is the difference between them?

A: We need to use the equation of time value of money to explain the concept of discounting and…

Q: Under what conditions is a market-based transfer price optimal?

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Q: What is the simple payback period for the wingtips? What is the discounted payback period?

A: The payback period refers to the time consumed to recover the cost which is incurred on investment…

Q: Which of the following is not a variable in the basic present value equation? Multiple Choice…

A: Investors are holding securities for the purpose of gaining the returns. The return is calculated…

Q: Define the term Discounted-Payback Period?

A: The payback period states the number of years that is taken by the project to recover the investment…

Q: The modified internal rate of return (MMIR) is the discount rate that forces the _____.

A: Explanation: Modified internal rate of return can be better understood from the below formula, where…

Q: List the advantages and disadvantages of the payback method.

A: Payback method is a capital budgeting method which helps to evaluate an investment based on the time…

Q: Is the accept-or-reject decision rule the same as in the simple -investment case? Explain how?

A: Yes, accept or reject decision rule is the same as in the simple investment because accept or reject…

Q: impact the price of MYR?

A: MYR: MYR refers to the Malaysian Ringgit. It is the currency used in Malaysia. The value of 1 MYR is…

Q: Explain the payback period model and its two significant weaknesses. How does the discounted payback…

A: The payback period one of  the method of capital budgeting. It shows the required time taken to…

Q: If the calculated NPV is negative, then which of the following must be true? O No answer text…

A:

Q: What makes the risk-adjusted discount rate approach appealing in practical application?

A: Answer: The discount rate may be changed to offset the risk involved in a project in order to…

Q: ple of when one would choose to use the Payback Period Method instead of the NPV / IRR me

A: Step 1 One of the most important decisions a business owner or management team will ever make is to…

Q: Where does the discount rate from present value came from? How to solve it?

A: In finance, a reduction rate is that the rate of come wont to discount future money flows back to…

Q: What is the conventional-payback method?

A: Conventional Payback Method

Q: Define the term Risk-Adjusted Discount Rate Approach?

A: The estimation of the present value of cash for high-risk investment is known as a risk-adjusted…

Q: What is the discount factor?

A: Discount factor, also known as the conversion factor refers to the value which is used to calculate…

Q: What are some criticisms of the payback method?

A: Payback Period: Payback period is the period in which the project recovers its initial cost of the…

Q: The discount rate can also be referred to as the?

A:

Q: Why Pay back period method is not as effective as NPV?

A: Payback method  It doesn't consider account inflation as well as the cost of capital. It ignores…

Q: What are the weaknesses of the payback method?  What other options do you have?

A: Pay back period is period required to recover initial amount of investment.

Q: What is the discounted payback period?

A: Discounted payback period is period for which present value of cash flow is equivalent to initial…

Q: Explain Discounted Present Value Techniques?

A: Capital budgeting is the process of allocating the resources of the company in long term investment…

Q: Why do some people say that MIRR should stand for Meaningless Internal Rate of Return?

A: Question is based on the concept of Business Finance

Q: What is the difference between smart beta ETFS and index ETFS?

A: Smart beta exchange traded funds (ETFS) is a systematic approach which gives the advantage of active…

Q: What are the weaknesses of the payback method?

A: Payback period is the amount of time required for firm to recover its initial investment in projects…

Q: What are the two main drawbacks of the payback method?

A: Payback period is the method in capital budgeting which refers to the time needed to recoup the…