Explain how the variability of cash flows impacts the firm’s value.
What will be an ideal response?
Value of the firm is the present value of future cash flows discounted at an appropriate rate given the risk of the company. The variability of cash flows will make the firm appear riskier and in turn increase the discount rate. This leads to a lower value for the firm.
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On November 10, Linden Co split its stock 5-for-2 when the market value was $55 per share. Prior to the split, Linden had 300,000 shares of $15 par value stock. After the split, the par value of the stock was
a. $3. b. $6. c. $15. d. $26.
How can goodwill be built in a refused claim? What dangers exist in offering an unexplained compromise?
What will be an ideal response?
Which of the following is not one of the criteria that have been suggested for lease capitalization?
a. Lessee builds up a material equity in the leased property. b. Lessee pays costs normally incident to ownership. c. Lease is between related parties. d. Lease agreement is cancelable.
The ________ column is the column corresponding to the entering variable
Fill in the blank with correct word.