What are the TWO primary advantages of using CAPM over DDM?  It adjusts for risks It does not explicitly consider risk Applicable to companies that pay steady dividends Applicable to companies that pay no dividends

Q: Why do DCMs use dividends and not earnings in their formulas? a. Because earnings are not equal to…

A: DCMs seek to evaluate the fair value of a company regardless of current market conditions, taking…

Q: Identify the incorrect statement below; Group of answer choices “Too much inventory can lead to…

A: Current assets are those assets which are to be utilised for the purpose of business in day to day…

Q: A challenge facing U. S. companies adopting IFRS is ______________________________. a.certain areas…

A: Some companies earlier following US GAAP have adopted IFRS for accounting and reporting purposes.

Q: Which of the following statements is incorrect?      A. Dividend payments can be influenced by cash…

A: Dividends are the amount of profits distributed to the shareholders of the company.

Q: you

A: Financial hardships Financial hardship refers to a situation in which a company cannot make payments…

Q: is(are)the reason(s) for profit maximization not a reasonable goal for firms. a. Profit concept…

A: Profit Maximisation Concept aims at carrying out the business activities in such a way that the…

Q: Which of the following statements is CORRECT?     One of the ways in which firms can mitigate or…

A: One of the ways in which firms can mitigate or reduce potential conflicts between bondholders and…

Q: Why might a company want to hedge its balance sheet exposure? What is the paradox associated with…

A: Reason for company to want to hedge its balance sheet exposure: For avoiding the impact of…

Q: What were the direct and indirect costs of the LIBOR scandal for Barclays? Are these costs only a…

A: The LIBOR Scandal: The LIBOR Scandal came to light in 2012 when Barclays and other banks admitted…

Q: under what circumstances might a company choose not to pay dividends?

A: Dividend Payment and non-payment will be decided by the company based on the future opportunity of…

Q: Floatation or issuance cost of new securities are present in an imperfect economy.     True False

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: Which of the following is False in regards to Share premium account? a. It will be shown under the…

A: THE SHARE PREMIUM ACCOUNT REPRESENTS THE DIFFERENCE BETWEEN THE PAR VALUE OF THE SHARES ISSUED AND…

Q: Discuss on the statement “Managers should not focus on the current stock value because doing so will…

A: Given statement is: Managers should not focus on the current stock value because doing so will lead…

Q: Which of the following statement is false?   a. None of above b. The capital structure should be…

A:

Q: The accounting assumption or principle of is being violated if a company that is a party to major…

A: Solution: The accounting assumption or principal of Full disclosure is being violated if a company…

Q: equity does not represent the market value of the company

A: There are various methods of arriving at a fair valuation of a company. Each of the methods give us…

Q: Identify the term being referred to: A theory that states that how high or low an entity pays out…

A: Solution:- There are two theories related to dividend-  Dividend relevance theory and dividend…

Q: 6. Business risk is that type of risk in which: a) The company is unable to meet its financial…

A: Types of risk consist of financial risk, operational risk and business risk.

Q: Which of the following statements is CORRECT? Select one:

A: The question involves the Concept of Agency and its related problems. It is established between two…

Q: why would investors prefer to invest in a company with a regular divided policy than a company with…

A: Investors prefer to invest in corporations where dividends are received on regular basis. The reason…

Q: WorldCom capitalized some costs that should,under standard accounting practices, have beenexpensed.…

A: a) Some companies take measures to inflate their reported income and to hide debts. This illegal…

Q: Indicate whether the following statements are true or false. If the statementis false, explain…

A: true

Q: Is this statement true or false? Give a reason for your answer. " Relevant or not, frequent changes…

A: Dividend policy is a policy that determines the division of earnings into dividend and retained…

Q: Company insiders who can earn excess profits on company stock based on their private knowledge…

A: Stock price depends on the information. As people get information, they start pricing the stock…

Q: Which of the following is NOT normally regarded as being a good reason to establish an ESOP?   a. To…

A: In the given question we are given 5 options and we are required to choose the correct option which…

Q: Respond to Jerry’s criticism that shareholders’ equity does not represent the marketvalue of the…

A: Balance sheet: This financial statement reports a company’s resources (assets) and claims of…

Q: Why would managers misrepresent the financial results oftheir companies?

A: Fraud:   It is an intentional misappropriation of the assets or the financial records of an…

Q: A company would repurchase its own stock for all of the following reasons except:a. it wishes to…

A: (A) A company would repurchase its own stock by the reason of, (1) prevent unwanted takeover…

Q: Companies are more apt to choose repurchases over dividends if doing so will enable them to I. take…

A: When a company decides to buy back its own stock from the market, this is known as a share…

Q: Discuss the arguments for each position. Some individuals maintain that the only proper accounting…

A: The argument for this statement is this that whether to use current value or not is totally depends…

Q: In times of crisis companies are often seen to be paying stable dividends. The question however is,…

A: Introduction: Dividend is a part of profits which is distributed among its shareholders. In the…

Q: Indicate whether its TRUE or FALSE. Then provide a complete explanation! Financial risk is…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: rue/False. The Dividend Discount Model can be applied to firms that do not pay dividends. Group of…

A: Dividend discount model is a method of estimating stock price by calculating the present value of…

Q: Inflation accounting is favored by modern financial analysts over the historical cost accounting as…

A: Following are the disadvantages of historical cost accounting in comparison with inflation…

Q: The accounting assumption or principle of __________________ is being violated if a company that is…

A: The Full Disclosure Principle states that all relevant and necessary information must be included…

Q: A publicly listed traded company is in financial distress. It is projected to stop paying dividends…

A: There are various valuation methods that can be used to value a comopany like discounted cash flow…

Q: The corporate valuation model cannot be used unless a company pays dividends. a. True   b. False

A: The corporate valuation model beginnings with determining the estimation of the assets or resources…

Q: Which is true of equity financing?   It has no fixed maturity date It provides a tax shield It…

A: Equity financing is method of raising finance by issue of equity shares. It is one form of source of…

Q: If a publicly traded company is trying to maximize its perceived value to decision makers external…

A: Assets are the resources of the organization which is useful for producing goods and services.…

Q: Explain how managers should not focus on the current stock value because doing so will lead to an…

A: The managers should act in the best interest of all the stakeholders. They should take such actions…

Q: Which of the following statements is false regarding diluted earnings per share?     Reporting…

A: Solution: "Diluted earnings per share is always the same as basic earnings per share" this statement…

Q: Which of the following statements is false?   A The declaration of a dividend may not result in a…

A: Dividend: Distribution of company profits to the shareholders ( Real owners of the company ) is…

Q: Which of the following statements regarding the PE ratio is true? A high PE ratio is indicative of a…

A: The Price Earnings Ratio (PE Ratio) is the ratio of the market price of a share to its earnings. In…