Business, 11.11.2019 20:31 brendariobranco

The only difference between the discounted dividend and corporate valuation models is the expected cash flow stream. expected future dividends are the cash flow stream in the discounted dividend model and expected free cash flows are the cash flow stream in the corporate valuation model. both models use the same discount rate to calculate the present value of the cash flow stream.

the discounted dividend model is especially suited for valuing companies that are privately held.

the only difference between the discounted dividend and corporate valuation models is the discount rate used to calculate the present value of the cash flow stream. the discount rate used in the discounted dividend model is the firm's required rate of return on equity, while the discount rate used in the corporate valuation model is the firm's weighted average cost of capital. both models use the same expected cash flow stream in the discounting process.

there are actually two differences between the discounted dividend and corporate valuation models: the expected cash flow stream and the discount rate used in the models are different. the discounted dividend model calculates the firm's stock price as the present value of the expected future dividends at the firm's required rate of return on equity, while the corporate valuation model calculates the firm's stock price as the present value of the expected free cash flows at the firm's weighted average cost of equity.

Answers: 2

Show answers

Another question on Business

Business, 22.06.2019 02:30

Consider how health insurance affects the quantity of health care services performed. suppose that the typical medical procedure has a cost of $160, yet a person with health insurance pays only $40 out of pocket. her insurance company pays the remaining $120. (the insurance company recoups the $120 through premiums, but the premium a person pays does not depend on how many procedures that person chooses to undergo.) consider the following demand curve in the market for medical care. use the black point (plus symbol) to indicate the quantity of procedures demanded if each procedure has a price of $160. then use the grey point (star symbol) to indicate the quantity of procedures demanded if each procedure has a price of $40. q d at p=$160 q d at p=$40 0 10 20 30 40 50 60 70 80 90 100 200 180 160 140 120 100 80 60 40 20 0 price of medical procedures quantity of medical procedures demand if the cost of each procedure to society is truly $160, the quantity that maximizes total surplus is procedures. economists often blame the health insurance system for excessive use of medical care. given your analysis, the use of care might be viewed as excessive because consumers get procedures whose value is than the cost of producing them.

Answers: 1

Answer

Business, 22.06.2019 12:30

Suppose a holiday inn hotel has annual fixed costs applicable to its rooms of $1.2 million for its 300-room hotel, average daily room rents of $50, and average variable costs of $10 for each room rented. it operates 365 days per year. the amount of operating income on rooms, assuming an occupancy* rate of 80% for the year, that will be generated for the entire year is *occupancy = % of rooms rented

Answers: 1

Answer

Business, 22.06.2019 19:00

All of the following led to the collapse of the soviet economy except a. a lack of worker incentives. c. inadequate supply of consumer goods. b. a reliance on production quotas. d. the introduction of a market economy.

Answers: 1

Answer

Business, 22.06.2019 21:20

Suppose life expectancy in years (l) is a function of two inputs, health expenditures (h) and nutrition expenditures (n) in hundreds of dollars per year. the production function is upper l equals ch superscript 0.40 baseline upper n superscript 0.60l=ch0.40n0.60. beginning with c = 1, a health input of $400400 per year (hequals=44) and a nutrition input of $400400 per year (nequals=44), show that the marginal product of health expenditures and the marginal product of nutrition expenditures are both decreasing. the marginal product of health expenditures when h goes from 44 to 55 is nothing, and the marginal product of health when h goes from 66 to 77 is nothing. (round your answers to three decimal places.)

Answers: 2

Answer

You know the right answer?

The only difference between the discounted dividend and corporate valuation models is the expected c...

Questions