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Why is the residual model more often used to establish a longrun payout target than to set the actual year-by-year dividend
payout ratio?
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- Explain the principal problem involved in using a dividend valuation model to value companies that are of very large and mature.What significant disadvantages does the widely employed payback technique of investment have?Calculate the contribution to total performance from currency, country, and stock selection for the manager in the example below. All exchange rates are expressed as units of foreign currency that can be purchased with 1 U.S. dollar. (Do not round intermediate calculations. Round your answers to 2 decimal places. Input all amounts as positive values.) Return on Manager's Weight 0.45 Manager's Return EAEE Meight Equity Index Europe Australasia 0.1 14 14 1.2 0.6 0.3 0,95 1.4 0.56 -0.01 161 21 21 Far East 19 Profit/Lose Currency Selection Country Selection relative to EAFE relative to EAFE relative to EAFE Stock Selection
- Explain Incremental-Investment Analysis?Is it worth investing in a project that costs up to 600 million dollars across 11 years but is expected to bring tens of billions of dollars in benefit between 60 and 120 years from now when there is a 0 percent discount rate? Why or why not? What about a discount rate greater than 0, should the policy be implemented then?Calculate the contribution to total performance from currency, country, and stock selection for the manager in the example below. All exchange rates are expressed as units of foreign currency that can be purchased with 1 U.S. dollar. (Do not round intermediate calculations. Round your percentage answers to 2 decimal places. Input all amounts as positive values.) EAFE Weight Return on Equity Index E1/E0 Manager's Weight Manager's Return Europe 0.60 20% 1.10 0.48 18% Australasia 0.10 18 0.50 0.20 16 Far East 0.30 25 1.30 0.32 16
- Compare the market multiple, LBO, and DCF models and discuss which one you prefer when it comes to the valuing of a private company. Explain.Fill in each statement with the appropriate capital investment analysis method: Payback, ARR, NPV, or IRR. Some statements may have more than one answer. a. نه ن ن ن نه b. C. d. e. is (are) more appropriate for long-term investments. highlights risky investments. shows the effect of the investment on the company's accrual-based income. is the interest rate that makes the NPV of an investment equal to zero. requires management to identify the discount rate when used.given Q=2P-500 what is P? write down P as a fuction of Q