5) The current year's profits of Ferro Inc. is 1200 b and the next year's profits are estimated as 1400 L. The current year's dividend per face value of 1 b is 35%. Compute the intrinsic value of a share of this company for an investor whose required rate of return is 25%.

Q: does open interest mean and where can it be found

A: In the financial markets there is flow of money out and flow coming in so contracts are settled and…

Q: What is horizon value?

A: Horizon value is the value of the project or the security at the end of a specified future date. The…

Q: What is Scenario Analysis?

A: Scenario analysis is an important step in the financial modelling. This is used to show the possible…

Q: What are value drivers?

A: Answer: The basic determinants of the cash flows of a project or primary factors in project…

Q: What does the disclosure principle require?

A:

Q: What is fundamental beta?

A: Introduction: Beta is nothing but a metric used to assess a portfolio’s uncertainty or risk, with a…

Q: What Does RiskReally Mean?

A: Risk: Risk can be defined as upcoming uncertainty about variation from anticipated earnings or…

Q: What is the purpose of a Limit Test?

A: Definition:   Limit test: It checks the data by evaluating it with the predetermined upper and…

Q: How does the change in the PBO occur?

A: Projected Benefit Obligation:   It is a pension concept in accounting as it is the present value of…

Q: FMS option

A: Options are called financial derivatives that provide buyers with the right, but not the obligation,…

Q: When is independence required?

A:

Q: What are the Differences in Maturities?

A: Maturities in the context of the bond mean that bonds are issued for a specific period of time. It…

Q: Why would a proposal not be accepted

A: A proposal refer to a document containing details of how to implement the plans for achieving the…

Q: What are the assumptions and criticisms of Gordon’s model?

A: Gordon's model, also known as the Gordon Growth Model, is a widely used method for valuing stocks.…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.