The stock of NorthPoint Corporation is currently selling for $10 per share. Earnings per share in the coming year are expected to be $2. The company has a policy of paying out 50% of its
earnings each year in dividends. The rest is retained and invested in projects that earn a 20% rate
of return per year. This situation is expected to continue indefinitely.
a. Assuming the current market price of the stock reflects its intrinsic value as computed using
the constant-growth discounted dividend model (DDM), what rate of return do NorthPoint’s
investors require?
b. By how much does its value exceed what it would be if all earnings were paid as dividends
and nothing were reinvested?
c. If NorthPoint were to cut its dividend payout ratio to 25%, what would happen to its stock
price?
d. What if NorthPoint eliminated the dividend

Salt corporation's contribution margin ratio is 78% and its fixed monthly expenses are $30,000. assume that the company's sales for may are expected to be $89,000. required: estimate the company's net operating income for may, assuming that the fixed monthly expenses do not change.

Afirm wants to hire a project manager (pm) at a salary of $100,000. 30% of pms have high ability, and 70% of pms have low ability. high ability pms generate $120,000 in revenue and low ability pms generate $80,000 in revenue. in addition to differences in productivity, high and low ability pms have different outside offers. if a high ability pm is not hired by the firm, she can work for another company at a salary of $80,000. if the low ability pm is not hired by the firm, she can work for another company for $70,000. high ability pms are also able to get a project management professional (pmp) certification at a cost of $1,000. low ability pms are unable to get a pmp certification (they would fail the test). the firm is not able to observe a pm’s ability, but is able to observe and verify whether or not the pm has a pmp certificate.(a) draw the extensive form of the game.expert answer

Which of the following statements is not correct? the stock of publicly owned companies must generally be registered with and reported to a regulatory agency such as the sec. when stock in a closely held corporation is offered to the public for the first time, the transaction is called "going public, or an ipo," and the market for such stock is called the new issue or ipo market. "going public" establishes a firm's true intrinsic value and ensures that a liquid market will always exist for the firm's shares. if you wanted to know what rate of return stocks have provided in the past, you could examine data on the dow jones industrial index, the s& p 500 index, or the nasdaq index.