FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

In the above DCF model, if the discount rate increases from 8 % to 1 0 % , while all other assumptions remain constant, how

In the above DCF model, if the discount rate increases from 8% to 10%, while all other
assumptions remain constant, how much would the intrinsic value of the stock change?
Provide the percentage change in intrinsic value. What could cause the discount rate to
increase?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions

Question

Describe the advantages and disadvantages of labeling as well as the value of identity-first/person-first language in respecting the dignity of all students.

Answered: 1 week ago

Question

★★★★★
Last year the Selling Corporation had earnings before interest and taxes (operating income) equal to $1 million. It paid $200,000 in dividends to its stockholders and $100,000 in interest to its...

Answered: 1 week ago

Question

★★★★★
Security is never guaranteed within an environment, especially against advanced persistent threats. Considering that a device or network will inevitably be penetrated, it is best to preemptively...

Answered: 1 week ago

Question

★★★★★
The VIX index on April 12, 2017 is at 15.73, up from about 12 at the beginning of the month. The SKEW index is at 136.66, up from 130 on April 5th. At the same time, on April 12, the SP500, DJIA, and...

Answered: 1 week ago

Question

★★★★★
A wire bent into a circular arc of radius \(R\) subtending an angle \(\phi\) carries a current of magnitude \(I\) (Figure 28.35). Use the Biot-Savart law to derive an expression for the magnitude of...

Answered: 1 week ago

Question

★★★★★
As of May 31, 2011, the bank statement showed an ending balance of \(\$ 17,250\). The unadjusted Cash account balance was \(\$ 16,450\). The following information is available: 1. Deposit in transit,...

Answered: 1 week ago

Question

★★★★★
Consider an economy that is populated by many identical riskneutral banks so that we can pick up an arbitrary representative bank and investigate its behavior. The bank makes loans at time 0, and the...

Answered: 1 week ago

Question

★★★★★
Describe the effect of a series or shunt input connection on the value of input resistance.

Answered: 1 week ago

Question

★★★★★
What is meant by the term matched transistors? What parameters in BJTs and MOSFETs are identical in matched devices?

Answered: 1 week ago

Previous Question Next Question