1. Let's consider that we are trying to model the growth of a stock. This stock has been worth 9 three months ago, 5,5 euros 6 months ago and is now 16 euros. If considered these as appropriate benchmarks for continuing growth, how would you model this as an exponential function (rate and interval)? 2. A population that has grown to 25 000 has a carrying capacity limit of 60 000, and it grows at a base rate of 14 % a year. How much does the population grow in the next three years when applying a logistic population growth model? How long until we could say that the growth ceases? 3. Let's consider an investment of 12 000 euros, that will generate an income of 3 000 in the first year, 4 800 in the second and 5 500 in the third. If the interest rate required for this investment is 8 %, what is the net present value of this investment, should it be undertaken? 4. Let's say we are preparing for an exam and we want to assure that we get a good grade for it. Say we start at the level of grade 1 and we learn 15 % of the total contents an hour. Let's consider our learning is exponential, hence this rate is being compounded. If we study 10 hours, what would be our grade according to the model? How long will it take for us to reach the level of grade 3? 5. Let's a product has a demand function of P= 160-1,3Q. Knowing that total revenue equals price times quantity (TR=PQ) At what quantity the company maximizes its total revenue and what is this maximum revenue?
Dividend Valuation
Dividend refers to a reward or cash that a company gives to its shareholders out of the profits. Dividends can be issued in various forms such as cash payment, stocks, or in any other form as per the company norms. It is usually a part of the profit that the company shares with its shareholders.
Dividend Discount Model
Dividend payments are generally paid to investors or shareholders of a company when the company earns profit for the year, thus representing growth. The dividend discount model is an important method used to forecast the price of a company’s stock. It is based on the computation methodology that the present value of all its future dividends is equivalent to the value of the company.
Capital Gains Yield
It may be referred to as the earnings generated on an investment over a particular period of time. It is generally expressed as a percentage and includes some dividends or interest earned by holding a particular security. Cases, where it is higher normally, indicate the higher income and lower risk. It is mostly computed on an annual basis and is different from the total return on investment. In case it becomes too high, indicates that either the stock prices are going down or the company is paying higher dividends.
Stock Valuation
In simple words, stock valuation is a tool to calculate the current price, or value, of a company. It is used to not only calculate the value of the company but help an investor decide if they want to buy, sell or hold a company's stocks.
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