Concept explainers
A
To calculate: The estimation of the intrinsic value of share of stock is to be determined when market capitalization rate is 20% per year.
Introduction:
In a company, intrinsic value is the calculated value. The estimated value is used in fundamental analysis and its cash flow. The amount of profit that exists in a contract.
B
To calculate: The expected dividend yield when market price of share is equal to the intrinsic value.
Introduction:
In a company, intrinsic value is the calculated value. The estimated value is used in fundamental analysis and its cash flow. The amount of profit that exists in a contract.
C
To calculate: The expected price to be one year from now is to be determined.
Introduction:
In a company, intrinsic value is the calculated value. The estimated value is used in fundamental analysis and its cash flow. The amount of profit that exists in a contract.
D
To calculate: when the
Introduction:
In a company, intrinsic value is the calculated value. The estimated value is used in fundamental analysis and its cash flow. The amount of profit that exists in a contract.

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Chapter 18 Solutions
INVESTMENTS(LL)W/CONNECT
- The variability in return on security due to changes in the level of interest rate in market is called as: a.Interest Risk b.Financial risk c.Call Risk d.Liquidity Riskarrow_forwardCurrent return is the ratio of annual income to: a.Difference between beginning price and ending price of security b.Total beginning price and ending price of security c.Beginning price of security d.Ending price of securityarrow_forwardWhat is the full form of "P/E"? a.Premium Exchange b.Private Equity c.Profitable enquiry d.Price-to-earning rationarrow_forward
- The yield curve shows the relationship between: a.None of these b.Yield to maturity and terms to maturity c.Yield to maturity and price d.Terms to maturaluty and pricearrow_forward58. Financial leverage measures ____________ a.Sensitivity of EPS with respect to 1% change in level of EBIT b.No change with EBIT and EPS c.1% Variation in level of production d.Sensitivity of EBIT with Respect of 1% change with respoect to outputarrow_forwardFinancial decisions involve ____________ a.investment sales decisions b.Investment, Financing and dividend decisions c.Financing cash decisions d.investment dividend decisionsarrow_forward
- Risk associated with a particular firm’s operating conditions is which of the following risk? a.Financial Risk b.Business Risk c.Liquidity Risk d.Interest Riskarrow_forwardThe discounted cash flow is which of the following approach? a.Forward approach b.Risk approach c.Earnings approach d.Backward approacharrow_forwardexplain The risk that arises due to use of debt by the firm causing variability of return for creditors and shareholders is: a.Liquidity Risk b.Call Risk c.Default Risk d.Financial Riskarrow_forward
- 53. A fixed cash flow in each year for a specified number of years is called as……. a.Annuity b.Compounding c.Reovery Factor d.Discountingarrow_forwardWhat is the full form of "NYSE"? a.Net uield Security Exchnage b.National Stock Exchange c.Net Asset Value d.New York Stock Exchnagearrow_forwardThe method of converting the amount of future cash into an amount of cash and cash equivalents value in present is known as: a.Annuity b.Compounding c.None of these d.Discountingarrow_forward
- Intermediate Financial Management (MindTap Course...FinanceISBN:9781337395083Author:Eugene F. Brigham, Phillip R. DavesPublisher:Cengage Learning
- EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT


