What is the relationship between the growth rate and the cost of equity implied in the dividend-discount model?
What will be an ideal response?
Answer: For the dividend-discount model equation to be viable, the growth rate should be smaller than the cost of equity because the model becomes meaningless if the growth rate is equal to or greater than the cost of equity.
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In documentation, the words inside square brackets are:
a. the author's exact words b. an emphatic parenthetical c. your words in the middle of a quotation d. none of the above
Brooks Company sells merchandise to customers. Under the accrual basis of accounting, Brooks should normally recognize:
A) revenue and the related expenses in the same accounting period as earned, whether payment is received or not. B) revenue when cash is collected and expenses when Brooks pays its creditor for the merchandise. C) revenue and expenses after all payments are made. D) expenses in the period the merchandise is sold and defer revenue recognition until the customer pays for the merchandise.
There are only two methods to derive an estimated line of cost behavior; the high-low method and the scatter diagram.
Answer the following statement true (T) or false (F)
When a company settles a warranty claim by replacing the defective goods, the journal entry will include a debit to ________ and a credit to ________.
A) Warranty Expense, Cash B) Warranty Expense, Inventory C) Estimated Warranty Payable, Cash D) Estimated Warranty Payable, Inventory