A valuation that simply capitalizes a forecast of operating income for the next year implicitly assumes that
Question:
A valuation that simply capitalizes a forecast of operating income for the next year implicitly assumes that residual operating income will continue as a perpetuity. Is this correct?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 46% (13 reviews)
Yes this is correct The following two valuations are equivalent using a 10 requi...View the full answer
Answered By
Muhammad Umair
I have done job as Embedded System Engineer for just four months but after it i have decided to open my own lab and to work on projects that i can launch my own product in market. I work on different softwares like Proteus, Mikroc to program Embedded Systems. My basic work is on Embedded Systems. I have skills in Autocad, Proteus, C++, C programming and i love to share these skills to other to enhance my knowledge too.
3.50+
1+ Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Accounting questions
-
Beginning inventory, purchases, and sales data for tennis rackets are as follows: April 3 Inventory 19 units @ $15 11 Purchase 12 units @ $19 14 Sale 26 units 21 Purchase 12 units @ $15 25 Sale 10...
-
Why is a simple forecast of operating income based on book value usually not a good forecast? When might such a forecast be a good forecast?
-
Prepare the annual operating expense budget for the next year using the formulas from problem #1 and the following assumptions: Remember there are 13 accounting periods in a fiscal year, each with...
-
Solve exponential equation. Express irrational solutions in exact form and as a decimal rounded to three decimal places. 2 2x + 2 x - 12 = 0
-
Consider the following information for Mr. and Mrs. Di Palma: On June 10, 2012, they sold their principal residence for $80,000 and incur $6,000 of selling expenses. The basis of the residence,...
-
Two variables x and y have a positive linear relationship. Explain what happens to the value of y when x increases. Give one example of a positive relationship between two variables.
-
Several years after reengineering its production process, King Corporation hired a new controller, Jaxson Erickson. He developed an ABC system very similar to the one used by Kings chief rival. Part...
-
Quality improvement, theory of constraints. The Wellesley Corporation makes printed cloth in two departments: Weaving and Printing. Direct material costs are Wellesleys only variable costs. The...
-
1 What is HRM 2 What is Training and Developmnt 3 What is Recruitment 4 What is Selection 5 What is HRP 6 What is Job Analysis 7 What is a Career Planning and Development 8 What is Job-Description 9...
-
DeBauge Realtors, Inc., is a realty firm owned by Jeff and Kristi DeBauge. The DeBauge family owns 100% of the corporations stock. The following summarized data (in thousands) are taken from the...
-
Valuation models can be dangerous if used naively: An analyst can plug in any growth rate or required return estimate to get a desired valuation. Indeed, a valuation model can be a vehicle to build...
-
What is the difference between an SF2andan SF3 forecast?
-
Assume that a file named scores.txt exists on the computers disk. It contains a series of records, each with two fields a name, followed by a score (an integer between 1 and 100). Write a program...
-
Jack is the V.P. for Pharmacy Services for a drugstore chain whose pharmacies are extremely busy. Some of the chain pharmacies and pharmacists have been fined for not counseling and not following...
-
A patient sues a pharmacy for malpractice, alleging that a medication prescribed by a physician and dispensed by the pharmacy caused the patient harm. The attorney for the pharmacy made a motion for...
-
In June 2018, Bernard Ramish set up a $48,000 trust fund through West Plains Credit Union to provide tuition for his nephew, Nathan Covacek, to attend Tri-State Polytechnic Institute. The trust was...
-
Bill is the pharmacy owner and PIC at Bills Pharmacy. The state Bills pharmacy is in has a freedom of choice law regarding third-party plans. You have been a long-time customer of Bills and you...
-
The following situations are similar, but each represents a variation of a particular crime. Identify the crime and point out the differences in the variations. 1. Chen, posing fraudulently as...
-
Why would a brand use single-view ads?
-
Briefly describe the following types of group life insurance plans: a. Group term life insurance b. Group accidental death and dismemberment insurance (AD&D) c. Group universal life insurance d....
-
Some PCl 5 is placed in a 10.0-L reaction cylinder. The temperature is increased to 500 K, and the following reaction reaches equilibrium. In which direction does the system react if the external...
-
Two popular methods of financial statement analysis are horizontal analysis and vertical analysis. Explain the difference between these two methods.
-
Two popular methods of financial statement analysis are horizontal analysis and vertical analysis. Explain the difference between these two methods.
-
Two popular methods of financial statement analysis are horizontal analysis and vertical analysis. Explain the difference between these two methods.
-
A client walks into your office to prepare a TY 2 0 2 0 return for federal and state. He has some charitable expenses worth $ 1 , 0 0 0 , which is not enough to itemize. So , he wants to take $ 3 0 0...
-
A taxpayer spends six months in the year working and living in the state. They move across the border, but keep the same job. For all intents and purposes, they are now domiciled in this other state...
-
Andre wants to make charitable contributions for the tax year to maximize the impact on his State return without needing to adjust for conformity issues. His AGI is $ 7 5 , 0 0 0 . What is the...
Study smarter with the SolutionInn App