an investor really cares about having voting rights in a firm. which type of financial security should this investor purchase?

The adjusting entry would be a debit to Prepaid Expenses for $8,100 and a credit to an expense account such as Professional Services Expense for $8,100.

The adjusting journal for trading companies is used to record transactions that have occurred but have not been recorded. Then this journal is also used to record transactions that have been recorded but require correction so that the value matches the actual situation.

Recording of adjusting journals can be grouped into two, namely deferrals or deferral of recognition of income and expenses recorded in accounts and accruals or recognition of income and expenses that have not been recorded in accounts.

This adjusting entry will ensure that the appropriate amount of expenses is recognized in the current year, based on the services that have been provided.

Learn more about Adjusting journal entry: brainly.com/question/13035559

#SPJ11

Among the five groups of adopters, which group is considered critical to long-term success known as Laggards.

Among the adopter categories, early adopters have the highest level of opinion leadership, whereas laggards are more likely to be older, conservative, and price conscious, according to Rogers, who also identified significant characteristics of each adopter category.

an individual who adopts a novel product, particularly a novel technological advancement, later than most others: I was a late adopter of smartphones and didn't have one for a very long time. Compare. advance adopter.

To know more about long-term success visit:-

https://brainly.com/question/28313342

#SPJ1

The findings affecting the consolidating or combining of accounts in the consolidated financial statements are certain accounting principles and guidelines that need to be followed while consolidating financial statements.

Any misinterpretation or manipulation of financial statements may result in improper consolidation or combination of accounts in the consolidated financial statements.Internal controls over financial reporting are the procedures and protocols that companies establish to ensure the integrity of their financial information. This includes ensuring accuracy and reliability in financial reporting, maintaining effective control over financial reporting, and ensuring compliance with applicable laws, regulations, and internal policies

Letters of representations from management are documents in which a company’s management provides written assurance of the completeness and accuracy of financial statements. They also indicate that management is responsible for the completeness and accuracy of financial statements.

In conclusion, the following points need to be considered while consolidating accounts for financial reporting:Companies should follow the guidelines and principles for consolidating accounts.Maintain effective internal controls over financial reporting.Ensure compliance with applicable laws and regulations.Provide a letter of representation from management to ensure the completeness and accuracy of financial statements.

For more such quetsions on Financial statements

https://brainly.com/question/15169974

#SPJ11

The salesperson has been provided a referral.

A referral is when a customer provides an introduction to another customer who might be interested in the salesperson's services or products.

This is beneficial because it helps the salesperson make a connection with the potential customer and build a relationship from the start.

When a customer provides a referral, it can give the salesperson credibility as the customer is vouching for the salesperson's services or products. This also helps build trust between the salesperson and potential customer as the referral is based on the customer's trust in the salesperson.

It can also open up potential opportunities that may not have been available without the referral. Finally, it can help the salesperson save time and resources that might have been used to find the customer on their own.

To know more about potential customer click on below link:

https://brainly.com/question/988073#

#SPJ11

The Burnside team was able to ship orders by implementing several strategies such as A. received smaller, more frequent orders of some of the raw materials.

They received smaller, more frequent orders of raw materials to ensure a steady flow of supplies. They also delivered finished parts in smaller batch sizes, more frequently, which allowed them to reduce inventory levels and respond quickly to changing customer demands.

Additionally, they focused on reducing the batch sizes on non-bottleneck processes, which helped to improve overall efficiency and throughput. By adopting these strategies, the Burnside team was able to meet customer demands and successfully ship orders on time.

Read more about supply orders here:

https://brainly.com/question/29489763

#SPJ1

Question: What strategies did the Burnside team employ to successfully ship orders?

how was the team able to ship the orders for burnside? group of answer choices received smaller, more frequent orders of some of the raw materials. all of the options delivered finish parts in smaller batch sizes, more frequently reduce the batch sizes on non-bottleneck processes.

Without knowing the specific outcomes and returns for each stock, it is difficult to provide a comprehensive answer. However, I can provide some general guidance on how to approach this type of scenario.

When holding a portfolio of two stocks that are highly dependent on a specific event, such as the passing of a healthcare bill, it is important to assess the potential risks and rewards associated with each stock. In this case, the possible outcomes and returns should be analyzed to determine the potential impact of the healthcare bill on each stock.

If one stock is highly dependent on the passing of the healthcare bill, while the other is relatively unaffected, then it may be appropriate to adjust the portfolio to reduce exposure to the highly dependent stock. This could involve selling some or all of the highly dependent stock, or increasing the weight of the less dependent stock in the portfolio.

On the other hand, if both stocks are highly dependent on the passing of the healthcare bill, it may be more difficult to reduce exposure to the event. In this case, it may be appropriate to consider hedging strategies, such as purchasing put options or using other derivatives, to help mitigate the potential risks associated with the healthcare bill.

Ultimately, the best approach will depend on the specific outcomes and returns for each stock, as well as the investor's risk tolerance and investment goals. A financial advisor or investment professional may be able to provide more specific guidance based on the investor's individual circumstances.

To know more about stock:

https://brainly.com/question/29992015

#SPJ1

the bond's coupon rate is 11.22%.

To determine the bond's coupon rate, the following formula must be used:

PMT = C × FV × CPMT = Coupon payment

C = Coupon rate

FV = Face value of bond

CP = Coupon Payment Frequency

N = Number of years until maturity

I = Yield to maturity/required rate of return on the bond.

PMT can be calculated by using the following formula:

PMT = FV × CP × (1 + i) / (2 × N)

The details are given below:

FV = $1000CP = 2 years

N = 20 years

YTM = 11.3%Price = $935

Calculating the PMT:

PMT = FV × CP × (1 + i) / (2 × N) = $1,000 × 0.5 × (1 + 0.113 / 2) / (2 × 20) = $56.1028

Hence, the bond's coupon rate will be calculated by using the following formula:

PMT = C × FV × CPMT = Coupon payment

C = Coupon rate

FV = Face value of bond

CP = Coupon Payment Frequency

N = Number of years until maturity

I = Yield to maturity/required rate of return on the bond.

C = PMT / (FV × CP) = $56.1028 / ($1000 × 0.5) = 11.22%.

Therefore, the bond's coupon rate is 11.22%.

To know more about Bond's coupon rate:

https://brainly.com/question/29765779

#SPJ11

If you can earn an annual interest rate of 4.7 percent, the amount that you have to deposit today is $19,128.36

To calculate the amount you need to deposit today, you can use the formula for the future value of a lump sum investment:

FV = P (1 + i)^n

Where FV is the future value, P is the present value, i is the annual interest rate, and n is the number of years.

In this example, the future value (FV) is $25,000, the annual interest rate (i) is 4.7%, and the number of years (n) is 5. This gives us the present value (P) as $19,128.36.

This means that if you deposit $19,128.36 today and earn a 4.7% annual interest rate, then in 5 years you will have the $25,000 you need for a down payment on a house.

It is important to understand the formula for the future value of a lump sum investment and how to use it, as this can be a powerful tool when making financial decisions.

Learn more about interest rate here: https://brainly.com/question/29415701

#SPJ11

In the books of H.O., the necessary accounts for the transactions with the branch of Gupta Traders are as follows:

To record the opening balances:

Petty Cash at Branch Account Dr. 1,250

Stock at Branch Account Dr. 77,000

Debtors at Branch Account Dr. 41,250

To Branch Account Cr. 1,19,500

To record goods sent to Branch:

Branch Account Dr. 3,78,000

To Goods sent to Branch Account Cr. 3,78,000

To record remittance of Petty Cash expenses:

Petty Cash Expenses Account Dr. 7,500

To Branch Account Cr. 7,500

To record remittance of Salary:

Salary Account Dr. 18,500

To Branch Account Cr. 18,500

To record Rent paid by H.O.:

Rent Account Dr. 6,000

To Branch Account Cr. 6,000

To record closing balances:

Petty Cash at Branch Account Dr. 1,880

Debtors at Branch Account Dr. 1,26,150

Stock at Branch Account Dr. 57,880

Discount Allowed Account Dr. 1,060

To Branch Account Cr. 1,87,970

To record amount remitted by the branch:

Cash Sales Account Dr. 26,250

Debtors at Branch Account Dr. 4,10,350

To Branch Account Cr. 4,36,600

To record the receipt of direct remittance by Mr. Sharma:

Cash Account Dr. 9,000

To Branch Account Cr. 9,000

To know  more about  transactions here

https://brainly.com/question/28059483

#SPJ4

The term structure of interest rates examines the relationship between short-term and long-term interest rates. Option (C)

The term structure of interest rates is a representation of the relationship between the interest rates for different maturities or terms of debt. It is also known as the yield curve or the nominal yield curve. It is utilized by financial institutions and investors to calculate bond yields and estimate the future direction of interest rates.

Short-term interest rates, medium-term interest rates, and long-term interest rates are all components of the term structure of interest rates. The yield curve may have a positive or a negative slope, or it may be flat, depending on the prevailing interest rate conditions for each duration.

Learn more about interest rates

https://brainly.com/question/13324776

#SPJ11

The claim that the short-run supply curve of a fully competitive company equals its marginal cost beyond the minimum point of the average cost (ac) curve is False . Hence option (B) is correct.

Costs in the short run are those that competitive company change quickly. Physical capital is not a short-run expense; but, labor and raw material costs are.

With cost on the vertical axis and quantity on the horizontal axis, an average cost curve may be drawn.

These graphs frequently include display marginal costs, which indicate the price of the final unit produced at each point and, in the short term, correspond to the slope of the variable cost curve (and, consequently, the first derivative of variable cost).

Learn more about average cost, from :

brainly.com/question/14415150

#SPJ12

The given statement "The manager of abc, inc decides to order the same number of widgets this year as last year. the manager has made an unstructured decision" is False because unstructured decision-making is an ad-hoc decision-making procedure that involves intuition, judgement, and opinion to solve problems.

An unstructured decision is one that is made without the use of a set process or protocol, or that relies solely on the decision maker's intuition. In this example, the manager has based their decision on the number of widgets that were ordered last year, making it a semi-structured decision. A semi-structured decision is one that is based on available data, but also takes into consideration the decision maker's knowledge and experience.  

In a semi-structured decision, the decision maker may take into account new information, research, or feedback in order to inform their decision. The manager in this example may have looked at current market conditions and the company's financial performance in order to determine the best number of widgets to order. This is in contrast to an unstructured decision, in which the decision maker may not have any information or research to inform their choice.

Therefore, it is important for managers to use a combination of structured and unstructured decision-making processes to make effective decisions that are based on facts, analysis, and sound judgement.

For more such questions on Decision-making processes.

https://brainly.com/question/19901674#

#SPJ11

Suppose that a white employer refuses to hire a Native American and selects a white applicant who is not as qualified. This decision is an act of discrimination.

Discrimination is defined as the unjust or prejudicial treatment of different categories of people or things, especially on the grounds of race, age, or sex. When someone is discriminated against, they are not given the same chances and opportunities as others due to their gender, race, or other factors. Discrimination is regarded as illegal and unjustifiable in most circumstances.

In the scenario provided, the white employer is discriminating against the Native American. The employer chose a white person who was not as competent as the Native American, indicating that the employer was motivated by some other factor, such as race or ethnicity. Discrimination is a practice that promotes inequality and hinders economic and social progress. Therefore, the correct answer is discrimination.

To know more about discrimination click on below link:

https://brainly.com/question/29801080#

#SPJ11

Dividends it the accounts which is an asset.

Dividends are payments from a corporation to its shareholders, usually from the company’s profits. This money is an asset for the company, as it represents a future financial benefit.

Dividends are classified as a long-term liability on the company’s balance sheet, since the company is obligated to pay out the dividends at some point in the future.

Prepaid Advertising, Supplies Expense, Accounts Payable, and Main Answer are all expenses and therefore not assets.

To know more about shareholders click on below link:

https://brainly.com/question/29803660#

#SPJ11

Alpha Inc.'s return on equity (ROE) is approximately 19.07%.

To calculate Alpha Inc.'s return on equity (ROE), we can use the DuPont analysis formula: ROE = Profit Margin x Total Asset Turnover x Equity Multiplier. Let's break down the given information and solve for ROE step-by-step:

1. Operating profit margin is 0.15.
2. Total asset turnover is 0.85.
3. Two-thirds of assets are financed through equity, so the equity financing ratio is 2/3 (or approximately 0.67).
4. Debt burden is 0.6.

Now, we need to find the Equity Multiplier, which is calculated as:

Equity Multiplier = 1 / Equity Financing Ratio = 1 / 0.67 ≈ 1.49

Next, we can plug in the values into the DuPont analysis formula:

ROE = Profit Margin x Total Asset Turnover x Equity Multiplier
ROE = 0.15 x 0.85 x 1.49

ROE ≈ 0.190725

To express the answer in percentage points, we multiply by 100:

ROE = 0.190725 x 100 ≈ 19.07%

To know more about return on equity visit:

https://brainly.com/question/27821130

#SPJ11

An advertiser should consider using automated bidding in the following situations: To optimize bids on both sponsored product and sponsored brand campaigns, toward sales efficiency, to optimize bids on sponsored product campaigns, and toward brand awareness and to optimize bids on sponsored brand campaigns,

Automated bidding is the practice of using software to automate the process of setting bids on advertisements that will be displayed on search engine results pages (SERPs). Automated bidding offers several benefits, including the following:

1. It saves time by allowing advertisers to set up and manage campaigns more efficiently.

2. It increases efficiency by automatically optimizing bids based on data and trends.

3. It reduces costs by ensuring that advertisers are only paying for the most effective ads.

4. It improves performance by allowing advertisers to set specific goals and then automatically adjusting bids to meet those goals.

To learn more about advertisers, visit: https://brainly.com/question/11568887

#SPJ11

A law or regulation affecting a product's characteristics that must be met before a product can enter a country is called a Technical Barrier to Trade (TBT) barrier.

What is a Technical Barrier to Trade (TBT)?

Technical Barrier to Trade (TBT) is a term used to describe a country's technical regulations, standards, and procedures. They are intended to ensure that imported products meet the importing country's requirements for human, animal, or plant health, as well as environmental protection and consumer protection.

TBT can also be used to describe the technical standard used to measure the safety, quality, and other characteristics of products. These requirements are intended to ensure that the products sold in the country are safe and of good quality.

To learn more about technical standard refer below:

https://brainly.com/question/12929561

#SPJ11

The pre-tax book income in future periods give rise to Deferred Tax Assets.

Deferred tax assets are temporary differences that will cause taxable income in future periods to be lower than pre-tax book income in future periods.

They arise due to the fact that the timing of when expenses and revenue are recognized for tax and book purposes may differ.

Deferred tax assets arise when expenses are recognized on the tax return in advance of when they are recognized on the books. This difference will result in a lower taxable income in future periods, resulting in deferred tax assets.

To know more about Deferred Tax Assets click on below link:

https://brainly.com/question/27763905#

#SPJ11

Scope and time management are important during the project lifecycle because they ensure that projects are completed on schedule and within budget. If either scope or time management is increased, it can lead to increased costs and delays in project completion.

During a project lifecycle, scope and time management play an important role. It aids in ensuring that the project is completed within the specified time frame and budget. Time management refers to the process of managing project time effectively, while scope management refers to the process of defining and controlling the project's scope, work, and requirements.

If the scope of a project is increased, there may be some impacts. One of the most significant consequences is that the project's completion time will increase. It would be necessary to make the proper adjustments to account for the extra work required. The extra time required may also increase the project's expenses, particularly if additional workers or resources are required. Additionally, an increase in scope may result in the project losing focus and becoming unfocused.

If a project's time increases, there may also be some impacts. First and foremost, it will increase the project's expenses. As time goes on, the cost of resources and labor increases. Additionally, an increase in time may result in the project's scope changing or losing focus. Finally, a project that takes too long to complete may become obsolete or irrelevant.

Scope and time management are both critical elements of a successful project lifecycle. They aid in ensuring that the project is completed within the specified time frame and budget. If either of these elements increases, it may have significant consequences for the project.

Learn more about Project lifecycle:

https://brainly.com/question/2794122

#SPJ11

A "Cold Chain" is the practice of keeping perishable commodities at a constant low temperature while being stored, transported, and handled in order to guarantee their quality and safety.

To make sure that goods are delivered and maintained at the proper temperature, it involves a variety of refrigerated trucks, storage spaces, and refrigerated packaging.

2. A differentiation approach is used by McDonald's Cool Chain. This is so that McDonald's can differentiate its products from those of rival companies while still keeping their high standards for quality and freshness.

3. McDonald's uses franchising as part of their growth plan. This helps the McDonald's value chain by enabling the company to grow quickly with little capital outlay. While McDonald's provides the brand name, operating system, and marketing assistance, franchisees are responsible for funding the opening of additional restaurants.

4. AFL Logistics Ltd (ALL) and McDonald's would have to make a number of revisions to the financial accounts if the merger went through. The balance sheet, for instance, would list ALL of the assets and liabilities, including any debt and inventories. The income statement would reflect ALL's revenue and costs, which can include Cool Chain-related costs like fuel and maintenance for chilled trucks.

5. By examining different cost elements, such as labor expenses, cost of products sold, and overhead costs, it is possible to assess the cost structures of McDonald's, its rivals, and the industry average in my nation from 2019 to 2021. A pertinent comparison would aid in assessing McDonald's cost management.

Learn more about  McDonald's Cool Chain

https://brainly.com/question/30117243

#SPJ4

Answer: A time deposit of money in an international bank located in a country different from the country that issued the currency is called a Eurocurrency.

What is a time deposit of money?

A time deposit of money is a type of bank account that requires the account owner to keep the funds in the account for a specified amount of time or term. In exchange for holding the funds, the bank pays a higher interest rate than it does for checking or savings accounts. The account owner has a guarantee of receiving the funds, plus the agreed-upon interest rate, at the conclusion of the term or maturity date.

What is a Eurocurrency?

Eurocurrency is a currency that is deposited in a bank that is situated outside of the country where the currency is issued. For example, if a person deposits US dollars in a bank in Canada, the US dollars are known as Eurodollars. If they were deposited in a bank in Japan, they would be referred to as Euro-yen.

In general, Eurocurrency transactions are governed by international regulations rather than those of the country where the bank is located.

To know more about the  "time deposit" of money :https://brainly.com/question/27631801

#SPJ11

As per the community helpers counseling center and the simplified software company, this effort could be considered a Strategic alliance (option b)

In this case, the Community Helpers Counseling Center and the Simplified Software Company lacked the resources to develop the meal planning program on their own. However, by joining forces, they were able to pool their resources and expertise to develop the program. This partnership is an example of a strategic alliance.

In conclusion, the partnership between the Community Helpers Counseling Center and the Simplified Software Company to develop a meal planning program is an example of a strategic alliance.

By working together, these organizations were able to leverage their respective strengths to achieve a shared objective. Strategic alliances are a powerful tool for organizations to pursue opportunities that they would not be able to pursue on their own.

Hence the correct option is (b).

To know more about counseling here

https://brainly.com/question/10630918

#SPJ4

Complete Question:

The Community Helpers Counseling Center and the Simplified Software Company have recently joined forces to produce a meal planning program for use on home computers. The two organizations decided to work together on the project since neither one could have developed the project with their own resources. This effort could be considered a:

A. Network organization

B. Strategic alliance

C. Cluster organization

D. Classical conglomerate

E. High-involvement organization

The statement "the least aggregate deferral test uses the profit percentage of each partner to determine the minimum amount of tax deferral for the partner group as a whole in determining the permissible tax year-end of a partnership" is false because it does not employ the profit percentage of each partner to determine the minimum amount of tax deferral.

The aggregate deferral test (ADT) is a test that the IRS uses to ensure that the deferral of income taxation on any basis other than the recognition of a realized gain is not abused.

The correct statement regarding the least aggregate deferral test. The minimum amount of tax deferral for the partner group as a whole in determining the permissible tax year-end of a partnership is determined by the most aggregate deferral test. Therefore, the least aggregate deferral test does not employ the profit percentage of each partner to determine the minimum amount of tax deferral for the partner group as a whole.

Hence, the statement "the least aggregate deferral test uses the profit percentage of each partner to determine the minimum amount of tax deferral for the partner group as a whole in determining the permissible tax year-end of a partnership" is false.

To learn more about aggregate deferrals: https://brainly.com/question/16208873

#SPJ11

When Sleep Number airs a half-hour program on cable television to inform potential customers about the health and sleep benefits of its products, this is known as Blank an infomercial.

An infomercial is a shape of television commercial that resembles everyday tv programming but is intended to promote or sell a product, service or idea. It generally includes a toll-unfastened telephone variety or website. most usually used as a shape of direct response television (DRTV), they're regularly application-period commercials (lengthy-form infomercials), and are usually 28:30 or fifty eight:half-hour in length. Infomercials also are known as paid programming (or teleshopping in Europe).

This phenomenon started out in the u.s.a., where infomercials have been typically shown overnight (generally 1:00 a.m. to 6:00 a.m.), outdoor height top time hours for industrial broadcasters. a few television stations selected to air infomercials as an opportunity to the previous exercise of signing off, whilst different channels air infomercials 24 hours an afternoon.

To learn more about Infomercial visit here:

brainly.com/question/12603070

#SPJ4

Complete Question: -

When Sleep Number airs a half-hour program on cable television to inform potential customers about the health and sleep benefits of its products, this is known as Blank______.

Multiple choice question.

product placement

direct television advertising

home television shopping

an infomercial

Yes, Randy should take the idea to another supervisor. Randy's training included various system procedures, and this idea does sound like a standard operating procedure.

The idea that Cheryl identified as her own should not be taken by Randy to another supervisor. Randy's training included various system procedures. It is not clear from the given information whether the idea sounds like a standard operating procedure.

Randy shouldn't take Cheryl's idea to another supervisor since Cheryl claimed it as her own. Randy can discuss the idea with Cheryl and see how they can further develop it. If Randy believes the idea is worth pursuing, he can talk with his supervisor and Cheryl to see if they can work together to implement it.

A standard operating procedure (SOP) is a written document that outlines the steps to be followed for a specific task or process. It is designed to ensure that a consistent approach is taken each time the task or process is performed. SOPs are typically used in organizations to ensure that processes are performed efficiently, effectively, and safely.

Learn more about standing operating procedure here:

brainly.com/question/30319538

#SPJ11

Selling goods or services directly to final consumers for personal, non-business use. The process of retailing involves promoting, wholesaling, and procurement.

Step-by-step explanation:
1. Procurement: This is the process of acquiring goods or services from suppliers for resale to consumers. Retailers need to find reliable suppliers and negotiate the best prices for the products they want to sell.
2. Wholesaling: This is the sale of goods in large quantities to retailers or other businesses, who then sell the products to the final consumers. Retailers buy products from wholesalers at a lower price, allowing them to make a profit when they sell the items to consumers.
3. Promoting: This involves advertising, marketing, and other activities to create awareness and generate interest in the products or services being sold. Retailers need to promote their products effectively to attract consumers and drive sales.
4. Retailing: This is the final step in the process, where the goods or services are sold directly to the final consumers for personal, non-business use. Retailers ensure that consumers have a pleasant shopping experience and offer customer support to address any concerns or issues.

For more such questions on non-business

brainly.com/question/28384844

#SPJ11

As interest rates decrease, the value of bonds with fixed coupons will increase. This is because newly released bonds with lower interest rates will provide lower fixed coupon rates, making previously issued bonds with higher fixed coupon rates more valuable. As a result, the bond generating the highest price increase will be the one with the highest fixed coupon rate.

a) A 5-year treasury bond with a 4% annualized coupon has a fixed coupon rate of 4%, which is lower than the junk bond's fixed coupon rate of 7%. Therefore, this bond will not generate the highest price increase.

b) A 5-year junk bond with a 7% annual coupon rate has a fixed coupon rate of 7%, which is higher than the treasury bond's fixed coupon rate of 4%. As a result, this bond will generate the highest price increase.

As a result, the bond that will generate the largest price increase in the scenario when the interest rates go down next year is a 5-year junk bond paying a 7% annual coupon rate.

for more such questions on interest rates

https://brainly.com/question/29415701

#SPJ11

Answer: to not touch kids under the age of 18

Explanation:

A body of law that is particularly relevant to public relations writers' centers around licensing professional accreditation.

Public relations professionals must have the necessary credentials and training to work in the industry. Regulatory bodies are tasked with overseeing the education and certification process, as well as ensuring that practitioners comply with industry standards and best practices.

To work in the public relations field, one may require a license, certification, or accreditation, depending on the employer's requirements and the laws governing the jurisdiction in which they work.

Learn more about "Public relations (PR)"; https://brainly.com/question/20313749

#SPJ11

The Intrinsic value is $98.63 billion terminal growth rate will be 10.40%.  The Intrinsic value is $97.51 billion if Rio Tinto's actual beta is 1.03 and the Terminal value is $174.56 billion.

a. The terminal growth rate is 10.40%.

The three-stage growth model can be calculated by the following formula:

Intrinsic value = (F1 / (1 + r)^1) + (F2 / (1 + r)^2) + (F3 / (1 + r)^3) + (PV of terminal value)

Terminal value = FCF3 * (1 + g) / (r - g)

g = Terminal growth rate

Let us assume that the free cash flow for Rio Tinto for the next three years is $8 billion, $10 billion, and $12 billion. The discount rate is 8%.

Terminal value = $12 billion * (1 + 10.40%) / (8% - 10.40%)

Terminal value = -$223.53 billion

PV of terminal value = -$223.53 billion / (1 + 8%)^3

PV of terminal value = -$167.05 billion

Intrinsic value = ($8 billion / (1 + 8%)^1) + ($10 billion / (1 + 8%)^2) + ($12 billion / (1 + 8%)^3) + (-$167.05 billion)

Intrinsic value = $98.63 billion

b. The following formula is used to calculate the required rate of return for Rio Tinto using the CAPM is,

r = Rf + β x (Rm - Rf)

Let us assume that the Expected market return is 11.30%

r = 2% + 1.03 * (11.30% - 2%)

r = 11.49%

Terminal value = $12 billion * (1 + 10.40%) / (11.49% - 10.40%)

Terminal value = $251.81 billion

PV of terminal value = $251.81 billion / (1 + 11.49%)^3

PV of terminal value = $168.61 billion

Intrinsic value = ($8 billion / (1 + 11.49%)^1) + ($10 billion / (1 + 11.49%)^2) + ($12 billion / (1 + 11.49%)^3) + $168.61 billion

Intrinsic value = $97.51 billion

c. The intrinsic value of Rio Tinto can be calculated using the same free cash flow projections.

Terminal value = $12 billion * (1 + 10.40%) / (8.30% - 10.40%)

Terminal value =  $174.56 billion

Therefore we can conclude that the Intrinsic value is $98.63 billion terminal growth rate will be 10.40%.  The Intrinsic value is $97.51 billion if Rio Tinto's actual beta is 1.03 and the Terminal value is $174.56 billion.

To learn more about intrinsic value

https://brainly.com/question/29676702

#SPJ4

The complete question is-

calculate the intrinsic value of Rio Tinto in each of the following scenarios by using the three-stage growth model of spreadsheet 18.1. treat each scenario independently.

a. the terminal growth rate will be 10.40%.

b.  Rio Tinto's actual beta is 1.03

c. The market risk premium is 9.30%