[Tatiana]

Hello.

Chapter 9. MCQ.

Question 3. Of course, idle time is a hint. But there is no ckear condition that idle time is paid, because salary mentioned in $/hour.
How to not be confused with this?

Question 5. Also have a problem. From my point of view we already use our employees for current job and pay them $8 per hour. Changing work doesn’t ifluence my labour cost. But if we take them away from current job we can’t do it and then lose its contribution ($12).
So the answer should be $60000 not $100000.

thanks in advance.

[Tatiana]

Thanks a lot

[Tatiana]

Hello.
There are tests at the end of each chapter in Lecture notes. Where I can find answers to them to check myself.

Thanks in advance.

[Tatiana]

Thanks a lot, I get it! =)

[Tatiana]

Thanks, vipulv!

But it seems to me that g should be the same for upper and lower part of the formula. But you use different values: 0 – for the top, and 0.03 for the bottom.
And also it’s told that shareholders are expecting 3% growth. So why it should be zero?

Well, but your answer is correct =)

[Tatiana]

Mr. John Moffat could you please explain why the answer is $2.56?

It’s MCQ. A company has just paid a dividend of $0.23 per share. Shareholders are expecting the dividend to remain at $0.23 per share net year but to increase at an average rate of 3% per annum thereafter.
Shareholder required rate of return is 12%, and the rate of corporation tax is 25%.

What will be the current market value per share?

I suggest that MV reflects the expected dividends. So I use growth model to receive MV at the end of year 1. And then discount 0.23 for 1 year and then put them togerther…

Thanks in advance!

[Author]

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