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Tammy Welsh has two investment options to choose from. The stocks of both ABC Inc. and XYZ Corp. are currently trading at $200. ABC Inc. is paying a dividend of $10, and is expected to trade at $215 in a year's time. XYZ Corp. is paying a higher dividend of $25. However, the price of XYZ's stock is only expected to go up to $203 a year from now. Experts are estimating inflation to be about 2% in a year's time.
A) In which stock should Tammy invest and why?
B) If the expected inflation rate was revised to 2.5%, would it alter Tammy's choice? Explain your answer.
Physical Controls
Measures and procedures used to safeguard assets, including inventory and equipment, from loss, theft, or unauthorized access.
Cashier Department
A division in a company or organization responsible for handling cash transactions, receipts, and disbursements.
Safety Deposit Boxes
Secure containers usually held within a bank vault, used to store valuable possessions, documents, or data that the owner wishes to protect.
Control Activity Over Cash
Practices and procedures implemented to manage and safeguard cash transactions and prevent fraud.
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